GoPro (GPRO) Up on Google's Investment in YouTube
Shares of San Mateo, California, based GoPro, Inc. (GPRO) rose Tuesday, defying markets which were down across the board. GoPro's stock was up 6.75%, rising $4.61 to close at $72.88 per share on volume of 7,725,002 shares. The stock was up on news that Google (GOOG) is investing millions of dollars to upgrade YouTube, which will benefit GoPro as the provider of mobile cameras likely to be used in the creation of YouTube videos.
According to Fox Business News Retail Analyst, Hitha Prabhakar, Google is investing millions of dollars in YouTube in an effort to keep talent in the company. Competing online video services have been attempting to draw top employees from YouTube, the standard bearer among online video providers. Prabhakar revealed that more video producers will respond by buying GoPro portable cameras to film their YouTube videos, raising GoPro's investment potential.
The Google initiative is aimed at helping stars to create high quality video content, and attempt to pair YouTube performers with Hollywood producers.
GoPro has sold over 10 million cameras ("capture devices") since rolling out its first high definition video camera in 2009. Sales exceeded 3.8 million in 2013 alone, making GoPro the largest provider of camcorders for the year, with a 45% market share. For the second quarter of 2014, GoPro disclosed that the number of YouTube videos produced with GoPro camcorders was up 160% from a year earlier. The move by Google is expected to enable GoPro to continue to grow its sales.
Since it's initial public offering on June 26 of this year, GoPro's stock is up over 200%, making it the top performing IPO of 2014. The stock will be added to the Russell 2000 Index on September 30.
For the 2014 second quarter ended June 30, GoPro reported revenue of $244.6 million, up 38.1% over the second quarter of 2013, and 3.8% higher than the $235.7 million in revenues for the first quarter of 2014. The company reported a net loss of ($19.8 million), or ($0.24> per share for the second quarter, versus a net loss of ($5.1 million), or ($0.08) per share, for the second quarter of 2013.
According to GoPro CEO, Nicholas Woodman, "We delivered a strong quarter of operating results driven by increased demand for our Hero 3+ Black Edition and demand for our accessory products. We are seeing a tremendous volume of quality content generated by our users and a 200% year over year increase in video views on YouTube, which is fueling our virtuous cycle whereby viewership of GoPro content drives sales. Our second quarter performance demonstrates our users' continued passion for GoPro's products, content and brand."
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