Video nasty

GoPro Shares Go Low

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Now where did I leave my action camera?
  • Why it matters

    Why it matters

    GoPro has cleverly tapped into the growing popularity of adventure and extreme sports and cornered a large segment of the action camera market. But concerns over safety and increasing competition have knocked its share price.

  • Facts

    Facts

    • GoPro’s share price has tripled since it launched at $24 a share in June.
    • The company’s market value has reached $9 billion.
    • HTC, Panasonic and Sony are all planning to launch their own action cameras.
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  • Audio

    Audio

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Jean-Louis Moncet has been reporting on Formula One for 25 years. The television reporter is well-known to car-racing fans in France, but last week the 69-year-old suddenly gained a worldwide audience.

Mr. Moncet had speculated on French radio that a helmet camera could have been to blame for the severe head injuries that former F1 champion Michael Schumacher sustained in a skiing accident in France last December.

The driver had been wearing a piece of equipment made by the U.S. company GoPro when he fell.

On Monday, GoPro’s share price fell by almost 14 percent, and it has not recovered up to now. In early trading in New York late last week, the stock was quoted at $70, about 25 percent lower than its high of $93.85 earlier this month.

GoPro, whose helmet- or equipment-mounted video cameras are lapped up by adventure sports enthusiasts keen to capture daredevil maneuvers, was only listed on the stock market in June. In the following weeks, its share price more than tripled from its $24 a share opening. But since then there have been several significant fluctuations. In early October, for instance, there was a decline of 7 percent when the founder of the firm, Nicholas Woodman, and his wife Jill transferred the company to a charitable foundation. Investors feared that huge numbers of shares would come onto the market.

Current share price worries aside, GoPro is one of the great success stories in consumer electronics in recent years. Ten years ago, Mr. Woodman introduced his first video camera to California surfers eager to film their rides and big waves. Today, the action cameras are found throughout the world, and the company’s market value has reached $9 billion. A garage company has turned into a globally recognized brand with almost $1 billion in revenues. Millions of skiers, surfers, bicyclists, and even pilots and parachutists now carry the tiny electronic devices.

A garage company has turned into a globally recognized brand with $1 billion in revenues.

Mr. Schumacher was also a fan of GoPro and the footage he captured on the gadget in the moments before his accident in the ski resort of Méribel allowed authorities to retrace the sequence of events. He is now out of a coma and receiving treatment at home.

The share price fluctuations caused little surprise among analysts. Alex Gauna from JMP Securities in San Francisco observes that this is normal for a stock such as GoPro. He pointed out that the firm’s products carry a warning about the inherent risks of sports such as skiing.

The biggest danger to GoPro, however, comes from somewhere else: more and more companies are producing helmet cameras. The mobile-phone manufacturer HTC is, for example, in the throes of launching its own piece of equipment. The Taiwanese firm is looking for new sources of revenues, because things are slowing down in its traditional business. And Sony and Panasonic, the Japanese electronics giants, are trying to enter the so-called action camera market.

But in any case, GoPro wants to market more than just equipment and accessories. The American firm is seeking to position itself as a media company, tapping into the millions of people who view YouTube videos made by GoPro and its advertising partners.

For example, when Austrian skydiver Felix Baumgartner leapt from a balloon in the stratosphere and plummeted earthwards, a GoPro camera filmed the whole spectacle. The apparatuses can also be easily attached to instruments, so that bands can record their performances.

With its own pay channels, GoPro could one day earn more money than it does today with cameras. Those who believe in its growth will no doubt be tempted by the current low share price.

 

The author is a Handelsblatt correspondent in Munich focusing on the outdoor and leisure industries. To contact the author: Hofer@handelsblatt.com

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