Wall Street. (NASDAQ:GPRO) Gopro has been the darling of Wall-Street investors this week. But shares of GoPro Inc closed at $31.33, up more than 30% from their IPO price of $24. Thursday was the first day of trading for the maker of HD high-action cameras. Now, GoPro’s stock ticker symbol is hotter than its wearable action cameras. After its IPO at $24 a share the stock shot up to $31.34. With about 123.1 million shares outstanding, this gives the company a valuation of $3.86 billion. GoPro CEO Nicholas Woodman has successfully pulled off alchemy by selling a gadget company stock as a media company to the investors. The alchemy is now worth about $3 billion out of the $3.86 billion valuation of the company.
GoPro Inc’s IPO was priced at the high end of GoPro’s expected range and raised $427 million, valuing the whole company at about $3 billion.
GoPro videos have received 500 million views on YouTube, and part of the company’s strategy is to build a media platform and start collecting ad revenue. GoPro wants to go beyond cameras. From technology to media, a new business model is born for GoPro Inc.
Extreme Business Model GoPro
Looking at the NASDAQ:GPRO fundamentals, it has a number of positives. It’s making money, and we have seen plenty of tech companies going public that have yet to turn a profit. It’s also built an exciting brand with strong growth (+87% in 2013) and close to $1 billion in revenue, despite some competition.
With headquarters in San Mateo, California, GPRO was founded in 2004 by GoPro’s CEO and Chairman Nicholas Woodman. Its first product was a waterproof camera that used film. In 2006, it launched its first digital camera. Three years later it began selling a high-definition camera.
There is a real risk factor and pressure on revenue that GoPro faces, as management acknoledges: “We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our revenue and profitability.”
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