Published: Tue, January 09, 2018
Markets | By Rosalie Gross

GoPro's plunging stock made short sellers $45 million in a single day

GoPro's plunging stock made short sellers $45 million in a single day

Camera maker GoPro announced Monday that it will be leaving the drone business and laying off at least 250 employees.

The action camera maker also announced that it is exiting the drone business, even though the Karma managed to take the second-place spot in its "price band" past year.

Woodman will reduce his 2018 cash compensation to US$1, the company said.

Shares of GoPro plunged by about 25 per cent on Monday (Jan 8) after it announced it was slashing its workforce and exiting the drone market following disappointing holiday-season sales. The company said it expects revenue of about $340 million for the fourth quarter after projecting $470 million for the quarter in November.

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The company was already forced to announce a price cut on December 10 for its core camera product, the HERO5, due to weak pre-holiday sales. The company has promised to continue support and service for current Karma customers, but has no plans to manufacture new models in future. "JP Morgan is our banker, but there is no active engagement to sell", GoPro said in emailed comments to Reuters. The cuts, said to largely impact the company's Karma drone division, were to be kept under wraps until mid-February - you know, well after CES. Unfortunately, as it stands, it seems an understatement to say that GoPro's early quarterly results leave a lot to be desired.

GoPro said it would lower its workforce to fewer than 1,000 employees from 1,254 now. "We entered the new year with strong sell-through and are excited with our hardware and software roadmap". Following Monday's windfall, GoPro short sellers have now made a total of $42.5 million betting against the company this year.

Woodman cited soft sales for Hero5 Black as the primary pain point but noted that pricing slashes improved business.

The company will reduce its employees from 1,254 to fewer than 1,000, according to the corporate statement.

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