On June 25th the market debut of GoPro took the investing world by storm. There was huge interest in this stock as it pushed up over $30 a share on its very first day of trading. This is not all that uncommon for tech stocks that IPO. When the stocks hit the public market they are gobbled up with strong demand. Stocks soaring 20% to 40% on the first day has become common over the last few years. What is uncommon is for the stocks to continue to move higher after the initial run up.
As of lunchtime on July 1st, 2014 the GoPro stock is at $49.61 a share. Most analysts predicted the stock would move higher but very few would have guessed that $50 was possible just a few days after the IPO. As anyone that has invested knows, there will be a pullback, but the question is, will the correction happen before or after the stock is up well over 150%? At this point, initial investors have doubled their money; in less than two weeks!
GoPro is very popular with the young crowd as they love to take photos and videos and post them to Instagram. The older demographic enjoys watching longer GoPro videos on YouTube. By simply searching GoPro on YouTube users will find thousands of amazing videos of outdoor activities including mountain biking, fly fishing, skiing and sky diving. Some of the videos are surreal and offer a perspective that was never available before.
The camera designer is thinking bigger than just a small and durable camera. There are many ways in which car companies and medical professionals can use a GoPro camera. While some have predicted Google Glass would be used by doctors and dentists GoPro has something to say about that. At this point, GoPro is well ahead of Google Glass in terms of product accessories. There are hundreds of mounts and cases for a GoPro while the market for Google Glass accessories is very small. Moving forward most expect to see Google and GoPro competing in this space.
What is interesting is that GoPro gets the majority of their video traffic from YouTube which is owned by Google. Google’s investment in Google Glass has a great deal to do with the fact that more and more people are looking to consumer content through video rather than just words or photos. If the GoPro stock continues to stream higher they will be able to invest in their own video software company which could really start a true battle with Google.