Comment by aanet
4 days ago
> While GoPro action cameras are built to withstand shock, the brand itself is looking distinctly shaky right now. Latest reports[1] are that founder Nicholas Woodman is propping the company up by extending it a loan of his own money to the tune of $20 million, at an annual interest rate of 6.5%, while a buyer is desperately sought. It’s believed GoPro may not survive the year without a new owner or fresh injection of cash, with Woodman’s intervention acting as a stopgap rather than bail-out per se.
$20m is really not much money to operate a company for 6 months. They must be close to break-even at least?
Is this because of the cost of memory or because the product is no longer competitive?
This article is not very satisfying to read, because it doesn't explore the reasons why GoPro is on the ropes.
From the financials, it's a little of both?
Memory is the acute issue causing their struggles; their most recent quarter saw a gross margin of 4.5% (that's revenue minus the direct cost of producing the cameras, divided by the revenue). That's a hefty fall from their previous margin of ~31%. This contributed to their operating loss of $57M in the last 3 months.
Thag being said, they haven't had a positive quarterly operating income since the last quarter of 2022, even when the margin was higher than 4.5%. So it's not like they were succeeding before the memory crunch, just losing money slower.
Adventure cams lose a market when people can’t afford to go on adventures?