By the end of 2015, Mark Woodson, the young CEO of GoPro, was listed as the 5th highest
paid CEO among U.S. public companies. Woodson raked in $77 million dollars and even managed to splurge on an early Christmas gift for himself. According to Forbes, On December 22 of last year, Woodson ordered a custom, 180 foot yacht with a price tag of $40 million. Woodson’s lavish spending appears to have served as a toast for a successful end to the year, although GoPro’s stock had declined over 70% during the last 12 months.
Here we are three weeks later, and GoPro stock has hit its all-time low of $10.87, caused by the Hero 4 Session Camera’s failure to meet sales expectations. Their lack of product sales has negatively impacted GoPros staff as 105 positions will be terminated. This was the same company that had a growth of 50% over the previous two years! The future of GoPro is of much concern to investors.
Evidently, the Hero 4 was a flop which was not worth the price tag GoPro set forth. While their product line will extend into the drone market in 2016, it doesn’t sound like something Investors can rely on to make up for lost sales.
The Karma Drone by GoPro is scheduled to release by the Christmas holiday season. GoPro will have a rough time competing with the Chinese company, SZ DJI Technology Co. which already sells top quality drones. Not only will GoPro have to ferociously compete for the growing drone market, they would also strain its partnership with 3D Robotics Inc. another drone-making company which includes GoPro cameras with its final product.
While the idea of a drone is appealing, GoPro is in dire need of innovation that can further increase the profitability of its business. Investors will continue to flee as they see the value of GoPro plummet.