The shares of GoPro are plummeting today. In fact, the company’s stock reached below its $24 initial public offering (IPO) price in June. The stock is trading at $23.63 per share at the time of this writing around 12:26 in the afternoon in New York.
Investors are now losing money as GoPro Inc (NASDAQ:GPRO) shares declined from its highest trading price of $86 to as low as $23.44 over the past 52-weeks. The company lost more the 62% of stock value year-to-date.
GoPro financial performance disappointed investors
Investors have been disappointed by GoPro’s quarterly financial performance. Last month, the action-camera maker reported adjusted earnings of $0.25 per share on $400.34 million in revenue for the third quarter. Wall Street analysts expected the company to report $0.30 per share on $433.4 million in revenue.
The management of the company explained that the quarter was more difficult than anticipated. The demand for the HERO4 Session camera was weak. GoPro decided to reduce its price from $400 to $300, which resulted to a $19 million writedown.
Analysts at Morgan Stanley commented that HERO4 Session was a downer for consumers. On the other hand, Pacific Crest said it seems like the action-camera market in the United States is “saturating quickly.”
GoPro faces patent infringement case
GoPro is facing a patent infringement case filed by C&A Marketing, the manufacturer of the Polaroid Cube camera. C&A Marketing alleged that GoPro copied the design of the HERO4 Session from its Polaroid Cube. Both cameras have striking similarities.
C&A Marketing requested a District Court in the United States to stop GoPro from selling the HERO4 Session and sought an unspecified amount of damages, which may included profits generated from the camera.
GoPro and C&A Marketing both receive patents for its cameras. C&A Marketing received its patent for the Polaroid Cube in May.
In March, GoPro received a patent for the HERO4 Session from the
European Union. The company received a patent from the United States for the camera’s plastic housing, and it is still waiting a U.S. patent for the entire camera.
GoPro HERO5launch delayed until 2016
Some market observers believed that the shares of GoPro wer also negatively impacted by the delay in the launching of the HERO5 camera.The company pushed back the release date of the HERO5 in 2016. GoPro previously planned to launch the camera in the fourth quarter of this year.
According to reports, the HERO5 will have a better resolution than its predecessors, and it is expected to capture Full HD photos and videos with a resolution as high as 8k. The camera is also expected to capture great films as deep as 60 meters underwater.
GoPro is hoping that the delay would increase the excitement of fans for the product.