GoPro filed confidential IPO paperwork with the Securities and Exchange Commission yesterday (7th Feb). This means that it hopes to be traded publicly on the stock market allowing us to buy shares in the company. The fact that it’s a confidential filing is interesting and while it’s purpose is to keep the company’s financial information secret until the last few weeks before trading is permitted, it actually hints at the company’s financial standing. You can only file for a confidential IPO if the company is generating less than a billion dollars in annual sales.
Last year’s figures stated $521 million in gross sales for 2012, and there were various predictions that they would double that in 2013. Doubling 521 million is certainly more than 1 billion, so they’ve failed to meet expectations if they are eligible to file for a confidential IPO.
That aside, it’ll be interesting to see how the trading goes especially when you consider it from the perspective of the traditional investors who probably don’t frequent YouTube or action sports websites and blogs, watching folk hucking off cliffs or thrashing vehicles around tracks. That being said, the timing of the IPO to coincide with the Olympics might help give them more exposure to these traditional financial markets.
However, while the helmet or action camera market is undoubtedly growing, and GoPro has become ubiquitous in that market, they are by no means the only player with Drift, Sony, Ion, Garmin and the recently rescued Contour all competing for their share of the same market. Consider that GoPro only has one product, but that product is becoming pretty much synonymous with action cameras and is becoming a genericised brand like Hoover or Bic. But then consider too what GoPro’s future plans might be. There’s been much talk of them looking to leverage the popularity of the UGC their cameras provide and become a media company, in a manner similar to that of RedBull perhaps. They have recently signed deals with Virgin and Microsoft to offer GoPro channels on flights and the X-Box respectively, but the holy grail would be something like the Redbull channel you find on Apple TV. With this proposed subtle shift from being purely hardware to becoming a media company, it might indicate the reasoning behind the IPO.
I think the IPO is certainly going to be good for Nick Woodman, but will it give the returns the investors hope for? Only time will tell.
The official press release is as follows:
SAN MATEO, Calif., Feb. 7, 2014 /PRNewswire/ — GoPro, Inc. announced today that it plans to conduct a registered initial public offering of its common stock. The offering is expected to commence after the SEC completes the review process initiated by GoPro’s confidential submission on Friday February 7, 2014 of its draft registration statement.
This announcement is being made pursuant to and in accordance with Rule 135 under the Securities Act of 1933. As required by Rule 135, this press release does not constitute an offer to sell or the solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.