Did GoPro Just Kill the Great American Tech IPO?
Say a quick prayer for GoPro (NASDAQ:GPRO) this morning.
The world’s premiere maker of go-anywhere cameras for skydivers, kayakers and other adventuring-types has entered a tailspin. The company just warned investors it’s slashing 250 jobs and ditching its drone business as it attempts to turn a profit this year.
The former IPO darling’s stock did not take the news well. Shares plummeted more than 20% on the news. A rumor that the company was exploring a potential sale was the only thing that saved the stock’s disastrous day.
But when the dust cleared, GoPro shares still managed to post a new all-time low close. Turn away if you’re squeamish — this chart’s not pretty:
Poor GoPro. The stock has lost almost 95% of its value since approaching $100 per share way back in 2014. Now we’re not even sure if the company is going to last on the public markets much longer.
Things have gotten so bad at GoPro that CEO Nick Woodman has reduced his 2018 pay to $1. He’s also looking to dispose of all excess inventory by any means necessary. He’s even resorted to swallowing several crates of unsold Hero 3 cameras…
Just kidding. Don’t forget — Woodman’s a billionaire. He cashed out when the company when public and reportedly bought a 180-foot “megayacht” worth as much as $40 million. Meanwhile, investors fitted GoPro shares with cement shoes and chucked this dud stock overboard months ago.
To be fair, we’ve been in GoPro’s bear camp for years. Price hasn’t given us any reason to be long (minus a quick snapback trade here and there). From a business perspective, GoPro is one of tech’s one-trick ponies. It has never found a way to expand beyond the niche market of the extreme sports crowd and other wannabe daredevils. Now its chart is enjoying a little cliff diving.
No wonder investors have soured on IPOs.
GoPro was one of the hottest stocks on the market when it debuted on the Nasdaq more than three years ago. In its first three months as a publically-traded company, shares jumped from $30 to nearly $100. But the party was short lived. After a swift drop, a new downtrend emerged. The stock has never even come close to sniffing these levels again.
Looking at other recent big-name tech IPOs and you’ll see more of the same. And after new millennial favorite Snap Inc. (NYSE:SNAP) fizzled in its 2017 offering, analysts are saying we probably won’t get many more high-profile IPOs than we’ve seen recently.
The big tech unicorns just don’t seem interested to jump into the public markets…
“The market for U.S. initial public offerings bounced back in 2017, but many bankers and investors remained discouraged as top-tier companies remain on the sidelines,” the Wall Street Journal reports. “That is unlikely to change in 2018. The number of companies raising money in U.S. markets is expected to pick up, but many of the highest-valued, big-name private companies, including Airbnb Inc., Uber Technologies Inc. and WeWork Cos., are expected to hold off on going public for at least another year.”
The stock market might be roaring higher to start the year. But the IPO market remains quiet for now.
That’s just fine with us. The established big-tech market leaders of 2017 are offering up plenty of ways to profit.