Karma production and will cut almost 300 jobs, or more than 20% of its global workforce. Now, the company says that it will focus on innovations in the core product lines.
GoPro has had a hard couple of years, as it faced intense competition and poor performance in the drone market. GoPro said it will exit the business once it sells off its remaining Karma inventory.
After the market digested this news, GoPro's shares plunged to by nearly 30 per cent - to an all-time low of $US5.10 in early morning trade on Monday (New York time).
Apparently GoPro has hired J.P. Morgan Chase to explore a potential sale of the company.
GoPro stock tanked after this morning's negative earnings preannouncement, but after the report that the company might be seeking a buyer, the shares bounced.
The news follows GoPro CEO Nick Woodman's comments to CNBC on Monday in which he said the company would be open to selling itself to a larger company, but otherwise plans to operate as a standalone business. The company will continue to operate independently if it ends up being acquired by another company, but it isn't clear as to exactly how much GoPro wants for its sale as of yet. The company was valued at $3 billion after its 2014 IPO, but has continued to struggle with weak revenues.
In particular, the company forecast its revenue will fall sharply by 37 per cent to $US340 million, which is far short of Wall Street estimates (of a more lofty $US472 million). Since then, its Karma Drone project has been closed down and GoPro was forced to cut the price of its Hero6 Black camera by $100 to spur sales. Apple would certainly have the cash to buy GoPro this year, especially if it repatriates a massive chunk of the cash hoard it has overseas, as most analysts generally expect it to do.
The company said it was cutting more than 254 jobs, or a fifth of its workforce, and exiting its drone business as part of its efforts to slash costs after fourth quarter sales fell by much more than feared. "If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at", Woodman said.