GoPro Inc (GPRO) Gashed by Polaroid Lawsuit

GoPro Inc (GPRO) faces a patent infringement lawsuit by Polaroid's parent company

by Alex Eppstein

Published on Nov 3, 2015 at 11:36 AM
Updated on Jun 24, 2020 at 10:16 AM

Another day, another drop for GoPro Inc (NASDAQ:GPRO). This time, shares of the action camera maker have been pressured 2.6% lower to trade at $24.89, after news broke that Polaroid parent C&A Marketing is suing the company for patent infringement.

This is more of the same for GPRO, which has lost 61% year-to-date -- in no small part due to a lousy earnings report late last month -- and come under heavy pressure from short sellers. In fact, during the latest reporting period, short interest rocketed 41% higher to reach almost 52% of the stock's total float.

Negativity has spilled into GPRO's options pits, too. During the past 10 sessions, the stock's November 21 and 26 puts have seen the largest changes in open interest, adding a collective 28,400 contracts. Buyers of the out-of-the-money strike believe the shares will decline below $21 and into record-low territory by front-month expiration, at the close on Friday, Nov. 20. Just yesterday, GPRO hit an all-time nadir of $24.30.

Yet, for one reason or another, bullish holdouts remain among the brokerage bunch. Nearly two-thirds of analysts still consider GoPro Inc (NASDAQ:GPRO) worthy of a "buy" or better rating. Also, the stock's consensus 12-month price target of $38.47 stands at a lofty 54.5% premium to current levels. All things considered, it looks like GPRO may be vulnerable to future downgrades and/or price-target cuts.

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