Shares of action-camera company GoPro (GPRO 2.39%) marched 54.8% higher in March, according to data provided by S&P Global Market Intelligence. CEO Nicholas Woodman gave a couple of presentations early in the month but nothing said there was a clear catalyst for the stock's outsize move. In fact, there wasn't much news that seems to adequately explain why the stock was up so much.
Generally speaking, when a stock like GoPro makes this big of a move, the catalyst is clear. For example, newly disclosed financial results can send a stock higher, especially when results exceed expectations. But GoPro didn't report in March. Bullish sentiments from Wall Street analysts can also make shares pop in the short term, but there weren't any prominent professionals commenting about GoPro last month either.
Filings with the Securities and Exchange Commission (SEC) can sometimes move a stock. But GoPro only filed to report transactions from insiders, including Woodman. In these filings, management sold GoPro stock related to their compensation packages. If anything, this should have caused the stock to go down -- investors typically don't like to see management sell, regardless of the reason. But GoPro stock rose nonetheless.
GoPro did announce a new product. On March 16, it rebranded its GoPro app as Quik, complete with new features to entice users. The rebranding likely relates to the company's ongoing strategy shifts. Speaking at the Morgan Stanley Technology, Media & Telecom Virtual Conference, Woodman explained the company's intentions of making its software more appealing to smartphone and camera users of all kinds, not just those who have a GoPro camera.
While this news is relevant, it doesn't seem to fully explain why the stock rose so much. But that's just how the stock market is sometimes. And it's a good reminder how hard it is to predict short-term moves.
GoPro is in the middle of a crucial transformation process, driven by its desire to sell more directly to consumers and grow its monthly subscriber base. The company ended 2020 with 761,000 subscribers to GoPro Plus, up 145% from the previous year. But many of these subscribers are on free one-year plans related to recent camera purchases. It'll be critical to watch what happens with these particular subscribers in coming quarters -- will they stay and pay when the time comes? If they do, then at least GoPro management will be delivering on one of its biggest goals for 2021.