Earlier Monday, the company unveiled plans to cut more than 20 percent of its global workforce and exit the drone business after a disappointing fourth quarter. GoPro said it will exit the business once it sells off its remaining Karma inventory.
Near 1520 GMT, shares of GoPro were down 25.9 per cent at US$5.57.
Once the company has completed its restructuring, it will be left with 1,000 employees worldwide.More news: Critical Need for Donors — American Red Cross
GoPro's Karma drone was supposed to help turn around the business when it was launched in September 2016. Only a few weeks after its release, GoPro issued a mass recall of 2,500 units because faulty engineering caused the drones to lose power mid-flight and drop out of the sky. Rumors about Apple deciding to buy GoPro have circulated since at least 2015, even appearing as recently as February 2017.
In its statement today, GoPro also cited the hard regulatory regimes in the U.S. and Europe as the reason why it doesn't think the drone market will be lucrative in the long term. "Could be anyone from a Nikon-type camera company to an HP to an Apple", said Michael Pachter, an analyst at Wedbush Securities Inc. But it wasn't enough and the Karma is now part of the company's other cost-cutting measures. "I think they made a strategic error in pursuing entry into such a competitive space, and it proves how hard consumer electronics innovation has become".
For the forth quarter of 2017, the company expects revenues of about United States dollars 340 million. Wall Street analysts had earlier forecast GoPro to report sales of $472 million for the quarter. The action camera company said today that demand over the 2017 holiday period proved less impressive than GoPro had expected, and that it would be forced to shed staff as a result. The company also told investors that its traditional cameras didn't sell as expected during the holiday quarter, forcing it to cut prices.