Shares of action camera company GoPro Inc (NASDAQ:GPRO) jumped 16.2% in June, according to data provided by S&P Global Market Intelligence, as shares continued to respond nicely to a reduction in the company's camera prices.
GoPro's shares have been moving steadily higher as investors bet the company's new pricing model that has cameras selling for $199 to $399 will resonate with consumers. It's speculation about how the company's actions will impact future earnings that investors are betting on further.
The biggest change in June was announcing Ty Ahmad-Taylor, who is an executive at Facebook, as a board member. The move adds new media heft to the Board of Directors and may bring the company a little closer to important platforms like Facebook, Instagram, and Facebook Messenger. Products like GoPro QuikStories are intended to be an easy video upload on social media networks, so having a social media executive isn't a bad idea for GoPro.
GoPro has bet its company on the idea that it can make more money selling lower margin cameras at a high volume than high margin cameras at a lower volume. But that's a risky bet given the fact that one of GoPro's main challenges the last three years has been shrinking margins.
I think the euphoria over GoPro's stock is yet to be earned, but that won't last long. The company should announce earnings around the end of this month and its next-generation Hero cameras should be announced late this summer or early in the fall. Results from operations and new features in cameras are what could drive a continued result, but right now the move in GoPro's stock is based purely on speculation.