Schulz Duggan
AI Supply-Chain Research, Optics/Memory/Macro, Original Asian/US Filings & Pricing
GoPro's 82% jump on its merger with Starman Optical leaves 28% of the share price riding on a private transceiver maker with no published revenue. Holders get $1.14 in cash and keep about 10% of the combined company, so at $1.59 the market values that stub near $113m. GoPro's revenue fell 31% to $105m, and the release does not say where Starman's $377m comes from. The stock also jumped 46% on heavy volume the day before the announcement. x.comÂ
GoPro's post-deal rally is a trap because buyers paid more than the fixed cash payout from Starman's acquisition will ever return. Starman, which makes optical parts for AI data centers, is buying GoPro for $285 million, about $1 a share in cash plus a small slice of the combined company, wiping out its heavy debt. GoPro lost $51 million last quarter as sales fell 31%, and warned in June it might not survive. Hype after a YouTuber disclosed an 8% stake pushed shares above the offer. x.comÂ
GoPro's shrinking business gives little reason to buy. Revenue fell 31% year over year with an operating loss of $119 million, and a $10,000 investment ten years ago would be worth $700 today. x.comÂ
GoPro's underpriced buyout offers roughly guaranteed 30% upside if the private-equity buyer raises capital for a late-December closing. Market makers have pinned shares near $1 ahead of October 30 options expiry. Deal completion remains uncertain, but a repricing is expected after October 30, with big upside in early November. x.comÂ
GoPro is slowly meeting its end, proof that a cool product does not make a great business without differentiation, bundling or a technology moat. It should have sold itself years ago; a buyer may still find some value in what is left. x.comÂ
GoPro should eventually be a good short, though it may squeeze first. The stock was a failed YouTuber pump, then crushed by its M&A deal, under which holders get an equity stub in the AI business. That deal likely drew many short sellers, and with zero shares left to borrow at IBKR, it squeezed from $1.3 to $1.7, a setup similar to Beyond Meat or Bird. x.com x.com x.com x.comÂ
GoPro has regained Nasdaq compliance with the $1 minimum bid requirement and is off the noncompliant list, setting up a press release that could make this week's options pay off. x.com x.comÂ
GoPro's 100% jump is not a turnaround; it reflects YouTuber Markiplier buying an 8.5% stake, making the stock one to avoid at around $1.36. x.comÂ
GoPro looks set to become the next meme stock, not as big as GameStop, maybe slightly smaller than Beyond Meat. The trigger is @ShaneStoffer's report that Markiplier put 30% of his net worth into GoPro, despite its $400M of debt, $27M of assets and roughly $50M quarterly losses. x.comÂ
