GoPro shares plunge on revenue forecast

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GoPro had to cut the price of its Hero4 Session camera in December to boost demand
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By BBC

Shares of GoPro plunged as much as 28% in after-hours trading after the wearable camera maker announced revenue forecasts below expectations.

The firm forecast revenue of $435m (£302m) in the fourth quarter, well below market expectations of $512m.

It also said a 7% cut to its workforce of 1,500 employees would cost up to $10m in restructuring costs.

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Disappointing sales of its action cameras over the holiday season were a major factor behind the lower forecast.

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The Silicon Valley-based company said its sales were also hit by a decision to cut the price of its Hero4 Session camera.

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“Fourth-quarter revenue includes a $21m reduction for price protection related charges resulting from the Hero4 Session repricing in December,” the firm said in a statement on Wednesday.

In October, GoPro had said there was weaker-than-expected demand for the device because of its initial high price.

The company has also been facing stiff competition from cheaper devices from Chinese rivals such as Xiaomi.

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Its current revenue forecast is more than 30% lower than that in the fourth quarter of 2014.

Its New York-listed shares fell to $10.50 in extended trading, which is less than half its initial public offering (IPO) price of $24 in 2014.

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