Bad Karma: GoPro slashes jobs, will exit its drone business

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Bad Karma: GoPro slashes jobs, will exit its drone business

GoPro Inc would be willing to partner with a larger sector player but is not actively engaged in a sale, the action camera-maker said yesterday, as its shares partly rebounded from earlier heavy losses.

GoPro's current market value of $980 million is down about 70 percent from when it listed in its June 2014 IPO - an offering that was led by JPMorgan. Earlier, shares had hit an all time low of $5.04, down 33%. Those things - and the GoPro name - helped put Karma into second place in its price band in 2017 behind category leader DJI.

"It is our responsibility to scale the business, so if the right opportunity presented itself, it's something we would consider", it added.

GoPro announced Monday it would eliminate its Karma drone business and lay off 20 percent of its workforce. GoPro also said that would kill its Karma drone business amid poor sales and a glitch that caused the device to shut down in mid-flight and led to a recall after it debuted in late 2016.

While the company will continue to support those customers who purchased its drone product, Karma, company officials said they will no longer be in the drone marketplace.

The company, which had 1,254 emplyees as of September 30, is reducing that number to fewer than 1,000.

The drone remained the second most popular of its price class after the recall, GoPro said, but an "extremely competitive aerial market", as well as a "hostile regulatory environment" in Europe and the United States made the product's future "untenable".

"As we noted in our November earnings call, at the start of the holiday quarter we saw soft demand for our HERO5 Black camera", said GoPro founder and CEO Nicholas Woodman in a released statement.

"Drones are a competitive space", Pachter said.

"Cutting costs is a good move, although now it's about if the company can turn this ship around themselves", Daniel Ives, analyst at GBH Insights, said.

Chief Executive Nick Woodman also said he would cut his cash compensation for 2018 to $1.

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