On the day of GoPro Inc (NASDAQ:GPRO)’s initial public offering, a snickering whisper could be heard among skeptical hedge fund players similar in tone to what was heard around the IPOs of Facebook Inc (NASDAQ:FB) and King Digital Entertainment PLC (NYSE:KING). The polite terms being used in public were the IPO valuations “rich” and reflected “optimal market conditions” to launch an IPO.

John Fichthorn announce short interest in GoPro

The murmur swirling near GoPro was also around sky-high valuations and the fact the company was being marketed as something it was not: a media play.  Today Dialectic Capital’s John Fichthorn put his money on the table, announcing on CNBC his short interest in the stock.

GoPro

“It’s a company that is trading at a high multiple for what it is, which is something that we often look for,” he said in the interview. “GoPro pitches itself as almost a media company, which has helped it garner this amazing multiple relative to the fact that it is just a consumer electronics camera company.”

After delivering a left-handed jab, Fichthorn hit with a powerful right upper cut.

“It’s funny, on their website they say they’re a versatile camera company, but you can’t find the word ‘camera’ in their SEC filings,” a comment that isn’t new in certain arenas.

Fichthorn sees a market competition

Fichthorn, defining the firm as a camera manufacturer, sees a market is awash in competition, particularly from cell phone manufacturers.  Customers can take “things like your basic smartphone that already has [high-definition 1080 pixel camera], that you can stick in a plastic case and get wide-angle viewing and attach it to a stick, and it’s basically a GoPro.”

The market share GoPro enjoys in a niche is not expansive and, judging from history, Fichthorn doesn’t see growth potential. The “adrenaline-junkie camera market” is small and GoPro is going to have difficulty expanding.

“It’s 10 million devices (in the extreme sports market), and (GoPro) already has 80 percent (market) share,” he said, then considered history. “You know, Apple invented the tablet, and it’s gone from 100 percent share to 30 percent. GoPro is not going to be able to hold on to this incredibly high percentage that it’s got today.”

“It’s a hyper-competitive, low-margin business in the camera business, as opposed to the media business,” Fichthorn said.

After reaching a high of $50 per share after its IPO, the stock is currently trading near $38.24, but $0.20 on the day.