Key Takeaways:
- GoPro shares surged 78% over two days to $1.56 on Markiplier's 8.5% stake
- Morgan Stanley's Erik Woodring sees further downside over the next 12 months
- Consensus target of $0.50 sits below the price, with one Sell rating
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GoPro surges 78% as Morgan Stanley sees 12-month downside
GoPro shares surged 78% over two days to $1.56, while Morgan Stanley analyst Erik Woodring sees further downside over the next 12 months.
Woodring's bearish outlook runs against a retail-driven rally that began Monday after YouTube creator Mark Fischbach, known as Markiplier, disclosed an 8.5% stake in GoPro's Class A shares through a Schedule 13G filing dated Aug. 20, making him the largest individual shareholder. The analyst consensus average price target on GoPro is $0.50, roughly 68 percent below Tuesday's level, with one Sell rating and no Buy ratings, according to data compiled by the firm.
The move builds on a record session Monday, when GoPro closed up 46% at $0.88 before adding 55% after hours to $1.37. Fischbach's position, worth about $9.3 million, gave his tens of millions of YouTube followers a concrete reason to pile into a small cap trading near all-time lows. GoPro's market value is roughly $139 million.
The rally does not repair the underlying business. GoPro posted Q2 revenue of $104.9 million, down 31.3% year over year, with a $51 million net loss and camera sell-through down 38% to about 291,000 units. The company has disclosed substantial doubt about its ability to continue as a going concern and cut 23% of its workforce this year.
The climb above $1 addresses one immediate risk: GoPro had fallen out of compliance with the Nasdaq $1 minimum bid requirement. Regaining compliance requires the closing bid to hold at or above $1 for 10 consecutive business days, so one session above the line does not resolve the listing question.
A higher share price also makes issuance more attractive to management. GoPro has sought approval to sell up to $800 million in Class A shares, including up to $100 million in newly issued stock, a dilution overhang existing holders must weigh against the rally.
The move is idiosyncratic rather than sector-wide. The Invesco QQQ Trust was down 1% to $708.08, while peers Sony Group and Garmin did not move on the Markiplier headline. GoPro's 52-week range is $0.57 to $3.05, with a beta of 2.44.
The divergence leaves GoPro as a volatility trade on top of troubled fundamentals. Investors will watch whether shares hold above $1 through the close and build the 10 consecutive business days Nasdaq requires, and whether management prices a shelf takedown into the strength. A confirmed compliance win, a firm answer on capital raises, or an update on the strategic review the board authorized in May would each change the risk picture.
This article is for informational purposes only and does not constitute investment advice.
