GoPro’s effort to become a major player media hit a big speed bump today: Shares plummeted more than 23% in post market trading after it said that sales of its wearable action cameras were “slower than expected” in Q4 — leading it to cut 7% of its workforce, equal to more than 100 jobs.
In addition, Zander Lurie stepped down as SVP of GoPro Entertainment. The former exec at Guggenheim Digital Media and CBS Interactive will join the company board.
The job cuts reflected “a difficult and deeply emotional decision,” CEO Nick Woodman said in a memo to staffers. “But it was a necessary one.” The 40-year-old billionaire was one of the highest paid CEOs in 2014 with a package mostly of stock awards valued at the end of that year at $77.4 million — now worth far less.
GoPro had been a Wall Street darling until last August. Bulls saw it as a growing force in movies and TV with tiny cameras that can take viewers into previously hard-to-record situations. They’re popular among skydivers and those who take videos from drones. One mounted on the helmet of a Mexican special forces member showed last week’s arrest of drug cartel leader Joaquín “El Chapo” Guzmán.
Last week GoPro said at the CES consumer electronics showcase that it will offer a “casual” 360-degree camera — which can be used to create virtual reality images — and team with YouTube to distribute them.
But the company wasn’t able to live up to the high expectations investors had when it went public in June 2014 at $24 a share, raising $425 million. It peaked in October 2014 at around $87. Following several disappointing earnings reports, the stock fell below the IPO price this past November. It closed today at $14.61, after a nearly 19% drop since New Year’s Day.
It could be far worse tomorrow: GoPro says today that it expects to report Q4 revenues of about $435 million — well below analyst expectations for nearly $512 million. That includes a $21 million hit from a repricing in December for its HERO4 Session waterproof mini camera.