GoPro (GPRO) Prices Secondary Offering, Stock Slides - Analyst Blog

Shares of GoPro Inc. (GPRO) plummeted 9.3% yesterday after it announced the pricing of its follow-on secondary offering of 10.4 million shares at $75 each. Out of the total, the company's CEO Nicholas Woodman is offering around 4.1 million.

Shareholders who are divesting their shares have granted the underwriters a 30-day option to purchase up to an additional 1.55 million shares. Notably, J.P. Morgan is the main book-running manager for the offering.

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

The company primarily intends to spend the funds raised through this follow-on offering on general corporate purposes and also fund its working capital requirements. The company plans to use the proceeds to execute strategic acquisitions and innovations.

GoPro has always been in the news for its stock price volatility brought about by the frequent recommendation changes made by analysts. While GoPro has a sound business model, the company's size, limited scope for differentiation and intensifying competition remain causes for concern.

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 holds a Zacks Rank #2.

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