Past week has been nothing short of a dream crusher for the action camera maker, as GoPro Inc (NASDAQ:GPRO) lost 16% share value during the week. The downward streak was triggered by a comment from a sports generalist holding GoPro’s camera responsible for the December skiing accident of formula1 driver, Michael Schumacher. The company is planning to press legal charges over the generalist for false accusation.
Jean Louis Moncet could have never imagined a lawsuit following his comment over the head injury of Michael Schumacher where he said, “Traumatic head injuries were caused by GoPro camera mounted to his helmet when he fell in a December skiing accident.” The comments from Moncet indicated that the installation of GoPro camera might have affected the strength of his skiing helmet.
An insider company source said that GoPro Inc (NASDAQ:GPRO) is considering legal actions that it could take against Moncet under the French judiciary system, which has comparatively lesser laws protecting media as compared the U.S. courts.
Moncet said last week,
“I saw [Schumacher’s] son recently. [Schumacher] is slowly waking up. The problem for Michael was not the hit, but the mounting of the GoPro on his helmet that injured his brain.”
Some reports have even considered these comments responsible for the plunge in GoPro Inc (NASDAQ:GPRO)’s shares.
When analysts were asked about the same, Alex Gauna, JMP Securities analyst, said,
“As often the case with very rapidly moving tech stocks, if momentum is broken and you stir in heightened macro concerns you can get this sort of correction. Sometimes investors shoot first and ask later.”
At the same time, Tavis McCourt, analyst for Raymond James & Associates, said that it was “hard to tell” whether Moncet’s statement was the primary culprit in the downward rally of GoPro. He further connected the slump to Mobileye NV (NYSE:MBLY) adding, “In a difficult market stocks that are big winners tend to take the biggest hits.”
Gauna further added,
“It’s a freak accident with a Formula 1 racer who went [off course] and hit two rocks. To point the finger at GoPro for the injury right now is irresponsible.”
This article has been written by Prakash Pandey.