GoPro, Inc. (NASDAQ: GPRO)
I’ve been following GoPro for some time now, and like most investors, I haven’t been very excited about what I’ve been seeing. Unfortunately, sales just haven’t been up to par in recent quarters. At this point, investors are getting anxious. With the recent launch of the Hero 5 and the Karma drone, investors are looking at this as the company’s last chance to prove that they can sell their products. However, recent news shows that things have gone bad to worse. Today, we’ll talk about the news, why it’s very bad news for the stock, how the market reacted, and what we can expect to see from GPRO ahead.
Recent News Shakes GPRO
As mentioned above, recent news has raised some new concerns for GoPro. At the end of the day, investors want to see sales, and they want to see them now. Historically, Amazon has been a very important part of the company’s strategy. In fact, it’s been estimated that Amazon makes up between 12 and 14 percent of the company’s sales. However, it was recently announced that the company has halted sales of the Hero 5 on the platform.
In a statement, GPRO said that they were unhappy with how Amazon was listing the Hero 5. Specifically, the two companies agreed on a specific price for the product. However, the company said that Amazon reduced the price lower than the agreed upon figure. As a result, they stopped sales through the popular e-commerce website.
GPRO has said that they don’t expect for the issue to be here for long. In fact, they expect that they will be able to strike a deal with Amazon and start selling the Hero 5 on the platform again within weeks.
Why This News Is So Concerning
While the news that the Hero 5 sales were halted is concerning, at the moment, the news is devastating to GoPro. At the end of the day, the company needs to show with this round of products that it has the ability to increase sales. The news that the company has halted sales on Amazon has caused investors to lose hope that the company will be able to show meaningful growth in sales.
How The Stock Reacted To The News
Since the news that GPRO would halt sales on Amazon broke, we’ve seen big declines in the value of the stock. On Friday, those declines continued. By the end of the trading session, the stock closed the day off at $13.60 per share after a loss of $0.24 per share or 1.73%.
What We Can Expect To See Moving Forward
Moving forward, I would love to say that I expect to see gains in the value of the stock ahead. However, that’s simply not the case. The bottom line is that GoPro needs to increase sales in order for the stock to grow. However, I don’t see that happening. Even before the Amazon halt, I didn’t have high hopes. With the Hero 5 having incredible competition and the Karma competing with far more trusted drones, sales simply don’t seem to be coming down the line. All in all, I’m expecting to see declines in the value of GPRO ahead.
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