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GoPro Enters the Mature Stage in it’s Product Lifecycle

September 29, 2017

It’s been 15 years since GoPro first entered the action camera industry at the reins of CEO, Nick Woodman and it’s becoming more apparent that the company needs to shift it’s focus away from sales growth and more towards sustained long-term profits. As GoPro enters the mature stage of it’s product lifecycle, market trends are suggesting that it’s continued success will be dependant on it’s loyal customer base and from it’s newly launched video editing apps. It’s no surprise that the action camera industry is experiencing a decline in sales growth due to mobile cameras being so much easier to use. While GoPro products will likely always dominate sales in the sports industry due to it’s wide angle lens and un-contestable durability, it’s becoming clear that for every day users, it’s just easier to use an iPhone.

After a failed launch for the Karma drone in 2016, it appears that innovation for the short term is heading towards a standstill. The key for their continued success during this time (in my opinion) is for them to capitalize on the opportunities that stem from their powerful brand awareness, and already high consumer engagement. GoPro boasts a strong 25+ million followers on social media which includes a focused presence on Instagram which they average 3,000 new followers daily. The opportunity for engagement from partnered advertising isenormous through these channels, which could be a huge boost to their revenue. GoPro entered late 2017 completely debt free which means they can incur debt and grow their business through innovation quite easily. In the mean time, I think it’s in their best interest to not over saturate their market with new less-developed products and rather wait for truly revolutionary products to be formed. In the mean time, their current sales model and strong customer loyalty will prop them up in order to sustain short-term success.

GoPro is currently selling at a stock price, which in my opinion, undervalues it’s intrinsic future earning power. As it currently sits, GoPro is selling at $11.10 per share after a high of $86.97 in 2014 and a low of $7.70 in 2017. Aside from the financials, in which I enjoy so dearly, GoPro is continuing to prove to be an exciting company to watch and likely will continue to be for the years to come.

Brandon Sardelis is a Commerce graduate from Dalhousie University. He is currently travelling abroad for the purpose of leisure and self-discovery. In his spare time he enjoys playing music, volunteering at festivals, playing sports and reading about finance.

Guest

Three’s Company: Snap Inc. vs Facebook vs Wall Street

August 4, 2017

Guest Article By: Brandon Sardelis

Everyone reading this article has Snapchat, right? We all know the filters, geo-tags, chat, and story telling features, but do any of you know about the numbers behind Snapchat and why the slick entertainment app is going through one of it’s toughest tests for stock-market survival yet?

If you have an eye for capitalism you may have noticed that Snapchat’s stock-value has been cut in half since it’s initial IPO in March. Cue bullish investors? You would think so, right? But there’s plenty reason for pessimism in the eyes of a bear investors on Wall Street to short the stock, and here are the reasons why.

More than 1 billion shares are speculated to flood the market in the next few weeks because Snapchat’s 180-day initial public offering lockup will be expired. The lockup prevented any investor who bought in early on Snapchat to sell their shares. Now that the shackles are off and the market is free, investors are speculating that a stock flood could wash away Snapchat’s value.

So what does that mean? We’re all going to still use Snapchat right? Well from a financial perspective it could mean that Instagram is going to try and take another kill shot at Snapchat soon. In the last year, Instagram took a huge portion of the story-telling market and now that Snapchat is treading water, they may try and finish the job.

When Facebook went public, it was much bigger than Snapchat, with more than 500m daily active users against 166m for Snap. Facebook was profitable during it’s IPO, while on the other hand Snap has been burning cash.

 Even as Facebook was falling in stock value during it’s first year on the public market, it was signing up new users at a faster rate than Snapchat, and was actually profiting from them.

So is Snapchat done? No, not yet. There is room for optimism. During the first quarter of 2017, advertising revenues have increased four-fold and that’s what matters. Even though analysts are freaking out about a slowdown in user growth this year from Instagram’s emergence in the story-telling market, I always like to think that competition drives innovation. This battle for supremacy between Snapchat and FB in my opinion will create wonderful things to come for both companies.

At the end of the day there can only be one winner between FB and Snapchat, but in my opinion the competitive natures of the market will force innovation as a survival mechanism. This will ultimately cause Snapchat to thrive in the years to come. So in summary, if you’re a bull investor who’s not frightened by potential share flood and a slow down in new user growth, then now could be the time to invest. Until then get your popcorn get ready and enjoy the fireworks.

 

Brandon Sardelis is a Commerce graduate from Dalhousie University. He is currently travelling abroad for the purpose of leisure and self-discovery. In his spare time he enjoys playing music, volunteering at festivals, playing sports and reading about the world of finance. Connect with him on Instagram, LinkedIn, and Facebook.