The Honeymoon is Over after Summer's IPO
GoPro, Inc. (GPRO) went public in July at $24 and traded up 100% in the first week of trading, getting lots of media attention.
The cool, user-generated videos with secure ways to attach cameras to helmets, bikes and animals gave the world a unique bird's eye view of what the consumer wanted to do with a camera. I am not kidding about the camera - click here to see a bird's eye view. I think the user generated videos are more important than the camera itself.
Putting the Selfie Before the Horse
I always find technology stocks get a little ahead of themselves when investors own the gadget itself a good example would be Apple, Inc. (AAPL) with iPod, BlackBerry Limited (BBRY) or Xbox, because investors have equal access and can touch and feel and show it off to their friends - but more important, it becomes an accessory - Apple iPhone's are an accessory for the text generation. This is translated to "WOW! Everyone will buy this!" So shares get on this bandwagon and run to such lofty multiples that it takes an accountant (or CFO) to bring you back to earth and ask "Do you realize how many of these they need to sell to achieve this level?" This is a question investors start asking themselves when the stock gets a pullback. The next being "What were we thinking?" I think GoPro investors are asking these questions.
GoPro will be viewed as one of the original technology investments for a generation, so shorting them is not a smart thing to do. New cameras, a new partner or a viral video from the website will reignite consumer awareness. This can and will move share price.
The concept behind GoPro's business comes in two main parts. First, GoPro has built its brand up as catering to high-end enthusiasts of extreme sports, ranging from snowboarding and backcountry downhill skiing to skydiving and deepwater diving. As social media sources have driven greater demand to be able to share one's experiences with friends, GoPro's first-person perspective has become increasingly attractive to its users. I love my GoPro and always carry it with me for family events or even normal bike rides - I use this camera much more than I use my cell phone camera - but mainly because the harness allows you to be hands free - and in many cases - unnoticed. The camera is great for fisherman, snowmobilers, really any sport enthusiast. As a market observer, I think share prices will be as volatile as watching the camera attached to the front of a surfboard.
In the early days of technology stocks, you had the four horseman: AOL, Inc. (AOL) , Microsoft Corporation (MSFT) , Intel Corporation (INTC) and Oracle Corporation (ORCL) . Twenty years later you have Facebook, Inc. (FB) , Twitter Inc. (TWTR) , Linkedin Corp. (LNKD) and maybe GoPro. In today's world of archiving every move, action or event, the four horseman of today's generation are not about accessing the internet - they are about using it with the latest and greatest new technology!
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