GoPro to Leave Drone Market, Cut Jobs

Gopro, Inc. - GPRO - Stock Price Today - Zacks

Gopro, Inc. - GPRO - Stock Price Today - Zacks

Just in case you have any doubt about it, let us tell you that GoPro has confirmed it's killing off its drone division and laying off 20 percent of its workforce. "If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at", Woodman said.

GoPro's potential sale inspired a mid-day rally in the stock, which plunged earlier on preliminary fourth-quarter figures. In November 2016, GoPro eliminated 15 percent of its workforce in an attempt to cut costs and turn the company around financially.

As for GoPro team members, this figure will drop from 1,254 to fewer than 1,000 employees worldwide. Following intense competition and low-profit margins, the company is finding it incredibly hard to make its drone business sustainable.

Shares of GoPro tumbled 21 per cent to $5.94 at 11:30 NY and earlier fell as low as $5.04, the most since the IPO.

While the Karma drone struggled from the beginning to reach the skies, with a number of failed release dates and an embarrassing recall after users reported drones losing power and dropping out of the sky, GoPro partly blamed drone regulations for their decision.

The drone remained the second most popular of its price class after the recall, GoPro said, but an "extremely competitive aerial market", as well as a "hostile regulatory environment" in Europe and the U.S. made the product's future "untenable".

The disappointing outlook sent shares plummeting almost a third to an all-time low of $5.04 in morning trading Monday.

GoPro CEO Nick Woodman introduces the new foldable Karma drone during a press event in Olympic Valley, California on September 19, 2016.

The company said it saw lower than expected revenue in the fourth quarter of 2017. Over the last ninety days, insiders have sold 704,907 shares of company stock valued at $6,478,800.

"GoPro is committed to turning our business around in 2018", the founder and CEO says.

"We expect that going forward, our roadmap coupled with a lower operating expense model will enable GoPro to return to profitability and growth in the second half of 2018". Wittine points out a quote that stands out from his conversations is a supply chain contact looking for a year of more challenges lying ahead for GoPro.

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