GoPro shares soar 30% in market debut
What started as one surfer’s idea to tether a video camera to his wrist to record his exploits on the ocean became a $3.5 billion empire Thursday, when GoPro Inc. began trading on Wall Street in one of the largest IPOs by a consumer hardware company in decades.
GoPro shares began trading at $28.65, 19 percent above the price the company set late Wednesday. By midday, shares prices topped $33 before closing at $31.34, up 30.6 percent for the day. The sports video-camera maker had priced shares at $24, the high end of the $21 to $24 range offered in its IPO filings, fending off pressures to raise the amount. With 17.8 million shares available, the stock was reportedly 20 times oversubscribed.
GoPro raised at least $427.2 million in its public debut, becoming the largest consumer electronics IPO since Duracell, which went public in 1991 and raised $433 million, according to investment research and data provider Dealogic.
“There probably hasn’t been a consumer electronics brand as dominant as GoPro has been in its category since the early days of the iPod or the iPad,” Dougherty & Co analyst Charlie Anderson said in a note to clients.
The company began trading on the Nasdaq stock exchange under the ticker symbol GPRO. Executives rang the opening bell Thursday morning, with a crowd surrounding them chanting “Hero” — the name of the company’s high-definition camera.
GoPro picked a fine time to make its public debut, on the heels of the busiest IPO quarter in a decade — in spite of a market cool-down in April, when tech stocks tanked and IPOs came to a screeching halt for about two weeks. But the pace quickly picked back up, and in the second quarter a total of 91 companies debuted on the public markets, up from 62 IPOs during the same quarter last year and 33 in 2012, according to a report out Thursday from research and consulting firm Ernst & Young.
Silicon Valley companies represented approximately 14 percent of the IPOs in the U.S. for the first half of this year. A successful GoPro IPO will likely encourage more tech firms that may have delayed their IPO, such as cloud-storage company Box, to enter the markets.
“This is a great year to IPO,” said Jacqueline Kelley, who oversees U.S. IPOs for Ernst & Young. “It’s not just companies that are mature businesses. This market is open for innovation and really welcoming entrepreneurs.”
Surfer Nicholas Woodman first conceived GoPro more than a decade ago as a strap to tether film cameras to surfers’ wrists. In 2009 the company released its high-definition camera, a small and lightweight gadget that can be taken to the ocean floor, through a blizzard or miles above earth; without glitter or flair but durable enough to survive most crashes and tumbles. The GoPro business also includes a line of accessories that attach the camera to just about any piece of equipment — helmet, bike frame, snowboard, surfboard or ski pole. Since 2009, the company has sold about 8.5 million cameras.
In an interview Thursday morning on CNBC, Woodman described the concept of GoPro as “the world brought to you by you.”
Many GoPro users and celebrated with the company on Thursday, posted videos of their latest extreme sports feat and cheering the company on social media.
Lindsey Holtaway of San Francisco summed up the sentiment of many loyal GoPro users in a tweet to the company: “Please keep making awesome things.”
Indeed, for some athletes, GoPro has become synonymous with their outdoor passion of choice: “My first stroke is turning the board and turning on the GoPro, and then I paddle into the waves,” said Redwood City, Calif., surfer Luke Kilpatrick.
GoPro has also been able to woo investors, with revenues that grew 125 percent in 2012 and 87 percent last year, and — a rarity for a tech company on its public market debut — profits.
GoPro is largely a family-run and, until 2011, family-funded operation —Woodman is the CEO and his wife and sisters work for the company, and most of the seed money came from Woodman’s father, Dean Woodman, a prominent Silicon Valley investment banker. Nicholas Woodman owned 49 percent of the company, but after trading, he now owns about one-third. The 39-year-old became a billionaire in 2012 after Chinese contract manufacturer Foxconn took a $200 million stake in GoPro.
GoPro plans to use the proceeds from the offering for debt repayment and investment purposes. The company had about $110.7 million in debt as of March 3.