GoPro, Inc. (GPRO)

[Tom4investor2011]

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GoPro is better off getting bought

Reuben Gregg Brewer ( GoPro ): As with Mobileye, a buyout could happen at GoPro. That said, GoPro is a troubled company, bleeding red ink and burning through cash.

GoPro made its name selling high-end cameras meant to film "extreme" activities. It's a niche product -- some might say a fad. But GoPro has a great name brand and a loyal following. A larger company in either the technology or consumer product space could add the brand to a broader portfolio without much trouble, and without the need to reach beyond the niche GoPro products currently serve -- a task that is basically behind GoPro's current struggles.

Despite six consecutive quarters of red ink, with more likely, GoPro has no long-term debt to complicate a takeover. But with a cash balance of $75 million, down from roughly $190 million a year ago, it's getting to the point where something has to happen. Founder and CEO Nicholas Woodman controls roughly two-thirds of voting power at GoPro, so there's probably an ego thing going on. But with cash running out, throwing in the towel and cashing out could start to look increasingly desirable.

...GoPro is no longer seen as an innovative company. That means it's just a name brand at this point. But that brand could really shine at a larger company. With cash running short, GoPro could soon find it has little choice but to sell itself.

FWIW