Apple Inc. may not have had its heart set on buying into the action camera world after all. It seems that a deal with GoPro Inc isn’t going to happen any time soon.
Rumors that the two firms would tie the knot sprang in the midst of a massive drop in share price at GoPro and stories that execs from the firms had met. Robert Stone of Cowen and Co, among others, just can’t see it happening.
Shares in GoPro have lost more than 30 percent of their value in the last three months of trading, and the firm is struggling to keep traders in line with its story about the future. On Tuesday after shares hit an all time intra-day low of $30.55, the firm’s shares bounced back as rumors that Apple was looking to buy it out emerged. Mr. Stone says the low potential in the market won’t attract Tim Cook.
Apple isn’t buying GoPro
When shares in a massive growth stock are crashing, rumor mongers tend to come out of the woodwork. We’ve seen this happen in recent months with firms like Twitter, Yelp, and BlackBerry. GoPro is just the latest target of those looking to trade the peaks and troughs of a volatile stock.
Mr. Stone of Cowen and Co dropped his price target on shares in the firm. He saw the move in recent months as a “valuation reset” but says that GoPro is still the strongest player in its product category. He reckons the firm is worth around $60 per share. That’s down from the $76 he said GoPro was worth in his previous report.
Apple is becoming a major player in the internet of things, and rumors about the firm’s interest in the action camera market have circled for quite a while. Though yesterday’s story asserted that Apple would try to buy GoPro, there have also been rumors that the firm will enter the market with its own product.
Mr. Stone also sees that as unlikely and reckons that GoPro is safe from most competition from the time being.
On Tuesday on CNBC GoPro CEO Nick Woodman laughed at the idea that he was working with Apple to sell his firm. He said that all talks between his firm and the tech major were about partnerships and app making rather than buying the firm.
Traders worry about GoPro’s future
The current problems faced by GoPro center around a piece published by Barron’s on Sunday, September 20. The outlet compared the firm to BlackBerry in a prominent piece and said that its range of action cameras were vulnerable to competition from both tech majors and smart phones.
Apple is not likely to compete with GoPro if Mr. Stone is right, and Tim Cook seems to have other plans. Cupertino is working on a car right now, and Stone reckons it presents a much bigger opportunity for Apple than the camera space.
As long as GoPro stays weak, and Apple stays strong, rumors about the two firms are likely to slide around Wall Street. Apple is still often connected with firm’s like BlackBerry by the thinnest of threads, so a buyout of Mr. Woodman’s firm doesn’t seem all that silly.
Speaking of market opportunity, Apple did buy into Beats, a firm that makes headphones. That shows it’s not scared of small markets if it can reap other benefits along the way.