Why GoPro Inc. Stock Tumbled Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of GoPro Inc  (NASDAQ: GPRO  ) were fading Wednesday, falling as much as 15% as the camera-maker's post-IPO rally finally fizzled.

So what: Shares of the high-tech camera-maker had more than doubled from its $24 IPO price after it kicked off trading last Wednesday, but the stock fell today on reports that short sellers were moving in. Stocks tend to be volatile in their initial trading days, but GoPro's fluctuations are even wilder than normal as Astec Analytics said that nearly 100% of the shares available for borrowing, and therefore shorting, have been borrowed, indicating many investors are betting on the stock to fall. 

Now what: Long-term investors in GoPro can probably ignore today's drop. While it's important to be aware of the short interest in the stocks you hold, heavily shorted stocks can also quickly spike on good news due to short squeezes from short sellers attempting to cover their bets. Even after the pop, shares still seem reasonably priced at a P/S of 6, and the company, which is only 10 years old, is already profitable. GoPro dominates the niche market of stunt and extreme sports-based video, and is set to begin collecting money from advertisers, which should give the company another valuable revenue stream. As video usage and wearable technology continues to grow in the Facebook/YouTube generation, I'd expect GoPro to thrive.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Read/Post Comments (0) | Recommend This Article (19)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3016578, ~/Articles/ArticleHandler.aspx, 8/27/2014 7:21:29 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement