It's no secret that GoPro has been in dire financial trouble of late, and rumors that it was for sale weren't far behind. So, when news hit my screen that a massive portion of the action camera company is set to be acquired later this year, it was hardly surprising, but I can't say the company acquiring it hasn't raised my eyebrows.
Self-proclaimed AI hardware company Starman Optical has reportedly agreed to merge with GoPro. It's a privately held company owned by Starman Holdings, which produces optical transceivers—devices that turn data into light for the use of high-speed communication. The $285 million deal will see Starman Optical acquire 90% of GoPro in a deal that pays shareholders $1.14 per share, which is around 30% more than the company's closing price on Monday. This deal will also see Starman Optical pay GoPro's outstanding debt of $92 million.
GoPro's shares were down by around 99% since its IPO in 2014, when its share price peaked at $93. The company's shares were trading at just $0.60 last Friday when markets closed, which put the company at risk of being delisted from the Nasdaq stock market. To ensure this wouldn't happen before a merger, GoPro's founder, Nick Woodman, provided $20 million to help keep the company afloat.
Now, GoPro says it will remain a publicly listed company.
“Advanced optics and imaging are essential to AI, national security and the broader economy, yet much of the critical hardware supporting these technologies continues to be manufactured overseas,” said Charles Tebele, Starman’s CEO. “Together, we intend to bring production of these critical components back to the United States.”
GoPro's shares jumped by 43% on Monday, when news hit that Mark Fischbach, a YouTuber known as Markiplier, had increased his stake in the company to 8.5%. Pre-market trading on Tuesday had the shares up a further 80% ahead of the merger announcement. The distinct air around the merger, and statement from Tebele, is that GoPro could become even more involved in US national defence, as regulations tighten around the foreign producers of camera technology.
The question is: are we about to see GoPro jump from action cameras to body cameras, or will it just be better able to capitalize if regulations put the squeeze on competition like DJI and Insta360?
