Robbins Arroyo LLP: GoPro, Inc. (GPRO) Misled Shareholders According to a Recently Filed Lawsuit
Robbins Arroyo LLP announces that a lawsuit was filed against GoPro, Inc. (NASDAQGS: GPRO) in the U.S. District Court for the Northern District of California. The complaint is brought on behalf of all purchasers of GoPro securities between September 19, 2016 and November 4, 2016, for alleged violations of the Securities Exchange Act of 1934 by GoPro’s officers and directors. GoPro develops and sells mountable and wearable cameras and accessories in the United States and internationally.
GoPro Accused of Overinflating the Capabilities of its Karma Drone
According to the complaint, on September 19, 2016, GoPro touted the impending release of its Karma drone at a product launch event, stating that it “packs Hollywood-caliber aerial, handheld and gear-mounted image stabilization into a backpack for $799.” A GoPro official subsequently promoted the drone in an interview with Bloomberg Markets, stating that it is expected to “dramatically improve the quality of footage that film and television producers are able to capture with GoPros,” that it is capable and versatile, and that the company has a “terrific installed user base that’s going to get a lot of functionality and use out of Karma.” On the news of Karma’s upcoming launch, GoPro’s stock increased 2.34% to close at $15.31 on September 19, 2016.
However, the complaint alleges that GoPro officials failed to disclose that: (1) its Karma drones were prone to losing power midflight, causing them to fall out of the sky; (2) the company had thus significantly overstated the utility of and likely customer demand for the Karma drone; and (3) the issue would necessitate a costly recall of Karma drones. On November 3, 2016, GoPro announced that revenue guidance for 2016 was in the range of $1.25 billion to $1.3 billion—a significant decrease from the guidance of $1.35 billion to $1.5 billion that the company had provided in reporting its financial and operating results for the previous quarter. On November 8, 2016, GoPro announced the recall of approximately 2,500 Karma drones, citing that the units were prone to losing power during operation. On this news, GoPro’s stock fell nearly 19% to close at $10.41 per share on November 9, 2016.
GoPro Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.