GoPro Hires JPMorgan to Advise on Potential Sale

Updated on
  • Company said it plans to cut more than 20 percent of workforce
  • CEO said he’d consider options to work with a larger company
GoPro CEO Woodman on Rumors of Sale Talks

GoPro Inc. has hired investment bank JPMorgan Chase & Co. to advise on a potential sale of the struggling wearable-camera maker, according to a person familiar with the matter.

Earlier Monday, the company unveiled plans to cut more than 20 percent of its global workforce and exit the drone business after a disappointing fourth quarter. GoPro’s hiring of JPMorgan was reported earlier by CNBC. The company’s shares, which earlier dropped as much as 33 percent, pared some losses after the report, declining 13 percent to $6.53 at 3:09 p.m. in New York.

"If there were an opportunity for GoPro to partner up with a larger organization that would help us scale, that’s certainly something we would consider," Chief Executive Officer Nick Woodman said in an interview with Bloomberg TV. "Our job is to align GoPro with consumer behavior and look for opportunities to expand the appeal and reach and relevance of GoPro. Sometimes that’s easier if done with a partner or an acquiring company."

Woodman confirmed that JPMorgan is GoPro’s banker. He said GoPro has “not engaged” with the bank to help sell the company at the moment.

In the years since its 2014 initial public offering, formerly high-flying GoPro has sharply narrowed its vision and held several rounds of layoffs. The company has long been criticized by investors for failing to diversify its product line away from its action cameras, which cater mainly to extreme sports enthusiasts. A buyer could leverage GoPro’s brand and gain profit contributions from device sales, analysts said.

"They fit well with any kind of hardware manufacturer. Could be anyone from a Nikon-type camera company to an HP to an Apple," said Michael Pachter, an analyst at Wedbush Securities Inc.

GoPro’s current market value of $955 million is down about 70 percent from when it listed in its June 2014 IPO -- an offering that was led by JPMorgan.

The Karma drone was supposed to help turn around GoPro’s business when it was introduced in September 2016. Instead, GoPro said narrow margins and a hostile regulatory market in Europe and the U.S. make the drone market "untenable." The San Mateo, California-based company has also faced intensifying competition in the action-camera market, as big tech companies from Samsung Electronics Co. to Alphabet Inc.’s Google have started selling similar products.

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