GoPro is the latest tech company to get on the IPO gravy train. According to Reuters, GoPro is aiming at a $3 billion valuation, offering 17.8 million shares at between $21 and $24, which could raise as much as $427.2 million.
GoPro has made their money from their tiny, wearable cameras that have struck it big with extreme sports enthusiasts. Those videos, and the GoPro YouTube channel, have amassed millions of views and subscriptions, and the cameras have been selling in droves with the help of high-profile athlete endorsements. That makes GoPro – unlike a lot of tech companies that seem to be going public these days – profitable. According to a CNBC report, GoPro’s S-1 filing last month revealed that the company took in $500 million in revenue in 2012, which grew to $986 million in 2013. More importantly for investors revenue has translated to profit every year since 2011, topping $60 million in 2013.
When the IPO launches, everyone will be able to participate directly using the Loyal3 Social IPO platform. Instead of using brokers or personal stock trading software that still charge commission for facilitating stock trades, the Loyal3 platform lets anyone invest directly in the company at the IPO price, at the same time as everyone else, without fees. GoPro is setting aside 1.5% of available shares for use in the Loyal3 platform.
In fairness, GoPro is probably one of the better investments to come out of the tech industry in recent memory – it has an established business model that has been profitable for years. Now, the fact that represents an especially promising IPO – as opposed to something that should merely be a baseline for any company that goes public – should be a little concerning for the investing community as a whole, but the concern about a second tech bubble is nothing new.
The take home here is that, if you’re considering buying GoPro stock, do your due diligence. Small-time investors, if they must go into stocks, are probably better advised to grow their money incrementally in well-diversified mutual funds – otherwise, by buying individual stocks in large amounts, especially those in the disruption-happy tech industry, you’re playing with fire regardless of how promising a company looks. The fact that you can get in – and get out – of GoPro stock without fees might make getting a quick buck out of the IPO feasible, but there’s always significant risk involved.
Here’s a link to the press release via Yahoo! Finance, which includes GoPro’s Loyal3 invitation in full.