Robbins Arroyo LLP: GoPro, Inc. (GPRO) Misled Shareholders According to a Recently Filed Class Action
Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed in the U.S. District Court for the Northern District of California. The complaint alleges that officers and directors of GoPro, Inc. (NASDAQGS: GPRO) violated the Securities Exchange Act of 1934 between July 21, 2015 and January 13, 2016, by making materially false and misleading statements about GoPro’s business prospects. GoPro is a camera company that develops hardware and software solutions associated with capturing, managing, sharing, and enjoying engaging content. The company’s core product is the HERO line of capture devices. It introduced the first HD version in 2009, and has since launched several models with more advanced features.
GoPro Accused of Failing to Disclose Weak Sales For Its Capture Devices
According to the complaint, GoPro failed to disclose that it was experiencing weak sales of its HERO line of cameras, and that its third quarter 2015 guidance was based on the assumption that GoPro would be able to sell a significant additional amount of HERO4 Session cameras. Thus, the complaint alleges, the company’s third and fourth quarter 2015 guidance was inflated and unrealistic. On July 6, 2015, GoPro launched the HERO4 Session, touting it as “the smallest, lightest, most convenient GoPro yet,” priced at $399.99. On July 21, 2015, the company announced its guidance for the third quarter 2015, anticipating revenue between $430 million and $435 million.
Then, on October 28, 2015, the company issued a press release announcing poor third quarter 2015 results, reporting revenue of only $400 million, far below the company’s guidance. In a conference call with investors, a GoPro official admitted that the company initially priced the product too high causing it to lower the price to $299, and that it underfunded marketing which impacted demand. On December 4, 2015, the company announced it was lowering the price of the HERO4 Session even further to $199. Then, on January 13, 2016, GoPro issued a press release, stating that its fourth quarter 2015 revenue of $435 million fell below the company’s guidance of $500 million to $550 million, it was reducing its workforce by approximately 7%, and that it was incurring approximately $5 million to $10 million in restructuring costs. GoPro attributed the cause of the shortfall again to lower than anticipated sales, and price protection related charges from the product’s repricing. On this news, GoPro stock fell $4.08 per share, or 27.9%, to lows of $10.52 per share during after-hours trading on January 13, 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.