GoPro (GPRO) Stock: Are The Declines Finally Over?


GoPro is a company that has fallen on hard times as of late, there’s no denying that. However, looking at the market it seems that the struggle may be over, at least for the short term. GPRO is climbing as the result of a new agreement. Today, we’ll talk about the details of the agreement, how the market reacted to the news, and what we can expect to see from GPRO moving forward. So, let’s get right to it!

GoPro Enters An Agreement With Microsoft

Late on Friday, it was announced that GPRO has entered into an agreement with MSFT. While there wasn’t much information offered with regard to what the agreement covered, it was disclosed that the agreement revolves around patent licensing rights. We also know that under the agreement, GoPro will have access to specific file storage and other system technology patents. In a statement, Microsoft Technology Licensing President Nick Psyhogeos had the following to say…

Microsoft’s licensing of personal wearable technologies is seeing strong demand as we partner with companies from all industries to optimize solutions for their customers around the globe.”

How The Market Reacted To The News

As investors, we’ve learned over time than any time positive news comes out with regard to a publicly traded company, we can expect to see a positive reaction in the market as a result. So naturally, after it was announced that GPRO has signed a patent license agreement with MSFT, the stock skyrocketed in after hours trading. Currently (3:05), GPRO is trading at $10.55 per share after a gain of $0.59 per share or 5.92% since the announcement.

Will This Agreement Be Enough To Save GoPro?

Looking at what we’ve seen in the market since the signing of the agreement, it seems as though things are looking up for GPRO. However, it’s important to remember that things aren’t always as they seem. The reality is that without more information with regard to how GPRO plans on using the patent licensing, it’s impossible to say whether or not this will be enough to save the stock. However, I have a gut feeling that it won’t be. Sure, investors are excited and the stock is currently climbing. However, excitement is an emotion and emotions fade!

When attempting to predict what we’re going to see from any company, it’s important to take a look at the product the company offers, the demand for the product, and the competition in the industry. When we look at these areas, they paint a very grim picture with regard to what we can expect to see from GPRO. First and foremost, let’s talk about the one positive, the product! GoPro is known for high quality cameras, and they really do offer a great product. However, when we start to look into competition and demand, things change a bit. When GPRO cameras were first offered, they were the only product of their kind. Today, competition is heavy, and GoPro is expensive! As a result, it’s not going to be the first choice for many consumers. Also, on the demand level, GPRO has created a product that has finely tuned targeting. Unfortunately, the targeting is so finely tuned that the audience for the product is incredibly small. Considering these factors, I’m expecting for excitement to wear off and the stock to tumble as it has been.

What Do You Think?

Where do you think GPRO is headed moving forward and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

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