GoPro’s stock is down dramatically today, off more than 6 percent, after it was announced that its founding team will move more than 5.8 million shares to a charitable group.
Immediate punditry called the action a way around the normal lock-up period that prevents insiders from selling shares in newly public companies for a set period of time. The rules are in place to prevent pump-and-dump schemes with freshly floated firms.
GoPro is up massively since its initial public offering. However, today is not its first large, single-day decline: After its first public earnings report, GoPro fell heavily. As TechCrunch reported:
For the second quarter, GoPro had revenue of $244.6 million, up 38.1 percent year-over-year, and earnings per share of $0.08 on a non-GAAP basis. Analysts had expected GoPro to earn $0.06 per share (non-GAAP) on revenue of $237.73 million. […]
Using normal accounting methods, GoPro lost $19.8 million in the quarter, or $0.24 per diluted share. By comparison, GoPro was profitable on a GAAP basis in its first quarter of 2014. In its year-ago quarter, the company also lost money, with a GAAP net loss of $5.1 million, or $0.06.
The move of the founders to shift shares doesn’t change the core business, but it does, in they eyes of some, indicate that the team is looking to take some near-term profits. That’s slightly ironic, but correct.
GoPro is among a larger cadre of technology, and technology-adjacent companies that recently went public, and have since performed strongly. Zendesk is kin, along with MobileIron. Some companies, however, like King Digital have struggled.
GoPro remains a public company without too much of a public record, amplifying the impact of insider sales and transfers. The company is worth nearly $11 billion, following the selloff.