The shares of action camera maker, GoPro Inc (NASDAQ:GPRO), have declined 33.08% since October 7, 2014 with current share price of $62.76. What was rather a dream run for the tech company is outweighed by short selling, lockup period expiration, and overvaluation of the company.
GoPro was the go-to stock in the tech industry before its downward rally began in the first week of October and despite of posting an excellent quarterly result and success of its latest HERO 4 cameras, its share are overwhelmed with short selling. As per the records of Astec Analytics, the last two weeks have witnessed an increase in short selling, which is in turn putting more pressure over its shares. According to the current stats, nearly 9.2 million shares of the action camera maker were held short on Monday.
At the same time, the lockup period for insider shares is ending on December 23 and it is likely to contribute further towards the downward rally of GoPro Inc (NASDAQ:GPRO). The decline in share prices started when the founders of GoPro, Nick and Jill Woodman, donated as many as 5.8 million shares to their charitable foundation.
In addition to these two factors, some analysts are opined that these factors along with overvaluation of GoPro Inc (NASDAQ:GPRO), selling at 67 times its forward earning, is likely to bring down the stock further.
Earlier last month, there were speculations that the company will start making its own drones for hobbyists and commercial users. These drones are likely to come with a tag price of $500 to $1,000 and will be available for sale late next year. This move is likely to help GoPro Inc (NASDAQ:GPRO) getting out of its core business and improve on its gross margins.
The shares of the company have declined 14.79% in the last 5 days.
This article has been written by Prakash Pandey.