GoPro Shares Jump 32% In Debut

Jun.26.14 | About: GoPro (GPRO)

By Marie Cabural

The shares of GoPro, Inc. (NASDAQ:GPRO) skyrocketed during its initial public offering today. The maker of the most popular and versatile camera offered its stock for $24 a share, the high-end of its proposed price.

GoPro and its shareholders raised approximately $427 million from selling 17.8 million shares. The stock price of the action camera maker climbed more than 32% to $31.73 per share at the time of this writing, around 2:43 p.m. ET.

GoPro’s valuation reached nearly $3 billion

Nicholas Woodman, the founder and CEO of GoPro, is the largest shareholder of the company with a 49% stake. He founded that company a decade ago, and its market valuation reached nearly $3 billion with the IPO. The management of the action camera maker plans to use the proceeds from the public offering to repay its debts and to acquire complementary businesses or assets.

The largest consumer-electronics IPO since 1991

GoPro’s public offering is the largest consumer-electronics IPO since Duracell International raised $433 million from its debut in 1991, according to Dealogic, a platform provider for brokerage firms, investment advisers and investment banking professionals. Duracell is now a subsidiary of the Procter & Gamble Company (NYSE:PG).

Charlie Anderson, an analyst at Dougherty & Co., emphasized in his note to investors that GoPro dominate the action camera market. According to him, “There probably hasn’t been a consumer electronics brand as dominant as GoPro has been in its category since the early days of the iPod or iPad.”

GoPro is a ‘hot brand’

GoPro introduced its first high-definition or HD camera in 2009. According to its regulatory filing, it already sold more than 8.5 million HD cameras, including 3.8 million last year. The cameras of the company are very popular among extreme sports enthusiasts because of its quality and versatility.

David Menlow, president of IPOfinancial.com, described GoPro as a “hot brand” and “on fire” given the popularity of its cameras. He emphasized, “First into a market usually gets the largest market share.” GoPro has loyal followings because it does not only sell cameras, but it also allows consumers to produce original, entertaining and inspiring content via GoPro Programming, a user-generated platform.

According to the company, GoPro Programming is distributed to GoPro Networks, a collection of video channels hosted on different social media networks such as Facebook (NASDAQ:FB) and YouTube. GoPro has 1.8 million subscribers on YouTube, and it believes that GoPro Programming plays a vital role in attracting and exciting consumers to purchase its products. The company recorded $1 billion in revenue last year.

Disclosure: None.