GoPro Announces Secondary Stock Offering, Shares Slide - Analyst Blog

Shares of GoPro, Inc. (GPRO) have plummeted another 4.2% on Monday, after the company announced a filing of a secondary offering. The company plans to raise $800 million through this offering and spend the amount on general corporate purposes.

Further, this secondary offering will help GoPro when the Initial Public Offering IPO lockup period ends on Dec 22. Investors usually sell their shares after the initial IPO allotment. GoPro CEO Nick Woodman (who controlls 44% of GoPro's voting power) also expressed his intention of selling a portion of his holdings. Nevertheless, Woodman made a specific mention that his decision to vend a portion of his shares should not be misread.

This CA-based portable camera maker had launched its IPO in Jun 2014, and the company's stock price has doubled since then. GoPro is a portable video camera maker offering cameras that can be attached to moving objects or even people. These cameras are specially used by sportsmen or sky divers to capture intricate details of a sporting episode.

The company enjoys a first mover's advantage in the high definition portable camera market and its extensive camera portfolio also aids in countering competition emanating from new entrants.

On Oct 31, the company reported strong third-quarter 2014 earnings with non-GAAP earnings coming in at 12 cents a share, way above the earnings of 1 cent reported in the prior-year quarter. The figure also highlights a 50% sequential improvement. Further, exiting the quarter, the company had cash and cash equivalents worth $237.7 million compared with $101.4 million as on Dec 31, 2013. Also, the company cleared its long-term debt successfully.

GoPro currently has a Zacks Rank #2 (Buy). Some other well-performing stocks in the sector include Skullcandy, Inc. (SKUL), Alps Electric Co. Ltd. (APELY) and Vuzix Corp. (VUZI). While Skullcandy and Alps Electric sport a Zacks Rank #1 (Strong Buy), Vuzix Corporation holds a Zacks Rank #2.