GoPro Quits Drone Business, Cuts 20% of Staff

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The company will be cutting staff numbers and exiting the drone market.

It did say, however, the restructuring plans announced today will result in a $23 million-$33 million (€19 milion-€28 million) hit to first-quarter results. GoPro said that new regulations being considered in the U.S. and Europe would reduce the overall market for recreational drones.

"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier", said Woodman, adding that the company "is committed to turning our business around in 2018".

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In other GoPro news, CEO Nicholas Woodman sold 165,343 shares of the company's stock in a transaction on Monday, November 6th. They rose from the lows through the trading session and got an additional lift after CNBC reported the company has hired JPMorgan to help with a possible sale. The company was valued at $3 billion after its 2014 IPO, but has continued to struggle with weak revenues.

Woodman confirmed GoPro would remain independent in the case of a sale or partnership.

GoPro's HERO5 camera line-up significantly underperformed during the holiday quarter, and the company ended up slashing $100 off the price to generate sales. Chief Executive Nick Woodman also said he would cut his cash compensation for 2018 to $1. Vetr raised shares of GoPro from a "sell" rating to a "strong-buy" rating and set a $11.55 price target for the company in a research note on Thursday, October 19th. The company now estimates its fourth-quarter sales at about $340 million, while it previously had been expecting about $480 million in sales. (NASDAQ:GPRO) to report earnings on February, 1. It's still early, but you can bet we'll start seeing analysts weigh in on companies that might buy GoPro by issuing their own lists of suggestions.

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Woodman, 42, rocketed to the top of the Bloomberg Pay Index, a ranking of the highest-paid USA executives, as GoPro shares soared after its initial public offering, boosting the value of his 2014 equity grant.

Even though GoPro is exiting the drone business, drone makers such as DJI might be interested in the company purely for its cameras, which could be packaged with their drones.

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