GoPro Inc (NASDAQ:GPRO) received lifeline in the market after announcing that the GoPro Channel app topped 1 million downloads on X-box video game system as viewers watched an average of 25 minutes of exclusive content. CNBC’s contributor, Timothy Seymour, however, remains skeptical about the ability of the news to move the stock higher, having been battered in the recent past on valuation concerns and effects of competition.
GoPro Inc (NASDAQ:GPRO) has come down from highs $94 a share to the current trading levels of $40 a share. The steep decline is already arousing a debate, whether it would be right to buy on the dip or get rid of the stock altogether. Seymour remains skeptical about GoPro’s prospects, having not popped by impressive margins on such a milestone achievement on the content front.
“I do think they have a very loyal following. I do think it is very interesting stuff but why do they have to post on the GoPro channel, why can’t they post it on YouTube. For a stock that is so oversold seeing 2% pop in what should be a fantastic news that makes me feel more nervous about owning the stock,” said Mr. Seymour.
Going short on the stock at the current levels would be a wrong move according to Seymour as there is tremendous pressure on the company and a lot of short interests that could bounce. Competition in the action camera space, on the other hand, is bound to increase, mounting more pressure on GoPro Inc (NASDAQ:GPRO) as more players enter the market.
A common argument has always been that the company is planning to become a media company in addition to hardware. Melissa Lee notes that the valuation the stock enjoys currently has to do with the media company sentiments. Whether or not GoPro Inc (NASDAQ:GPRO) will be successful as a media company remains to be seen.
“What is so amazing about this company is that it is built on this notion that it is going to turn into a media company. Although, the company on the last earnings conference call said that is a marketing tool and it is not meant to be revenue generating,” said Mrs. Lee.
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