Hmmmm..... 76.1M shares coming off restriction on 2/17. I smell dilution and a drop in pps...... She may bounce a bit next week, but I'll be eying up some longer term puts as the 17th approaches. Who knows how much the insiders will dump.....
GoPro investors could face bumpy road through MarchFont
10:32 AM ET 2/6/15 | MarketWatch
Real time quote.
By Jennifer Booton, MarketWatch
Lockup on 76.1 million GoPro shares will expire Feb. 17
NEW YORK (MarketWatch)--GoPro Inc. danced around the way it plans to monetize media, issued a below-consensus earnings per share outlook and said goodbye to its chief operating officer--but that isn't the main catalyst driving its stock lower on Friday, analysts say.
Shares of GoPro (GPRO) fell nearly 13% in recent trade after swinging sharply into the red after the company's earnings conference call late Thursday. They had initially been up more than 5% after the camera maker reported bigger-than-expected sales during the holidays.
The coming lockup expiration on 76.1 million GoPro shares is partly to blame. Wedbush Securities analyst Michael Pachter warned clients in a note on Friday that shares may continue to trade lower through a week or two after the lockup expires on Feb. 17.
Overall, analysts were cautiously optimistic on GoPro after the late-Thursday earnings call, with most maintaining their bullish ratings on the stock--which has more than doubled from its June IPO price--but warning investors of a potential roller coaster in the near term.
"This is going to get bumpy," said Pacific Crest analyst Brad Erickson.
J.P. Morgan Chase maintained an overweight rating and $70 price target on the stock, but predicted that the denominator in the P/E multiple would continue to move up, and that the stock would find institutional support. Pacific Crest maintained a sector perform rating on the stock, but didn't provide a price target, and Wedbush maintained an outperform rating but lowered its 12-month target to $70 from $98. The average rating and target is hold and $67.10, according to FactSet.
Pachter said he believes shares could level out starting in mid-March, especially if GoPro starts to deliver on its guidance. GoPro's first-quarter adjusted earnings- per-share outlook is between 15 cents and 17 cents a share on revenue of $330 million to $340 million. Revenue topped Wall Street's $325 million expectation, but earnings per share was below the Street's 17-cent estimate.
In a note to clients, J.P. Morgan Chase analyst Paul Coster blamed part of Friday's selloff on GoPro's outlook, saying "under-promising goes unrewarded."
Meanwhile, Wedbush's Pachter said he wasn't concerned about the seemingly amicable departure of COO Nina Richardson, but that her resignation was a surprise and was also likely playing a part in Friday's selloff.
"Certainly there is material for the skeptics," Coster said.
The San Mateo, Calif.-based company also skirted around questions regarding its plans to monetize media, saying it isn't a focus today despite announcing a partnership with Roku earlier Thursday and a streaming channel on the LG Smart TV app in January.
See Also: GoPro is building a media expire
"We believe management's commentary on its call around software development progress or media monetization potential was a net negative relative to sentiment," said Pacific Crest's Erickson. "And the COO's resignation didn't help."
-Jennifer Booton; 415-439-6400; AskNewswires@dowjones.com
> Dow Jones Newswires
February 06, 2015 10:32 ET (15:32 GMT)
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