TL;DR
GoPro issued a warning of continued concern after storage prices rose by 80-115%. Revenue decreased by 26%. He is looking into sales, defensive line and 23% layoffs.
GoPro issued the warning on Monday have”reasonable doubts about the company’s ability to continue as a going concern.” The action camera maker reported a 26% drop in first-quarter revenue and expects to breach several loan covenants.Shares fell as much as 14%.
The reason is memory. GoPro revised its earnings forecast to “significantly affected” increase in memory prices from 80% to 115%. In April, suppliers informed the company of a planned decrease in memory supply, which will further reduce projected sales. The same DRAM redistribution that killed the cheap smartphone is now threatening to kill GoPro.
The mechanism is the one we detailed last week. Samsung, SK Hynix and Micron have shifted their wafer capacity from consumer DRAM to high-bandwidth memory for AI data centers. HBM margins are 70% or higher. Consumer DRAM margins are between 20% and 30%. Memory manufacturers chose the higher-margin customer. Everyone else pays more or gets less.
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GoPro doesn’t have the purchasing power to absorb the price increase. It’s not Apple that can sign quarterly contracts and pass the cost on to consumers who buy a $1,000 phone. It’s a sub-$1 billion company whose products sell for between $300 and $500 and depends on commodity storage to store high-quality video. When memory doubles in price, the product becomes unprofitable.
The company refused the lender because it did not comply with the terms of the loan. It does not expect to have sufficient liquidity to meet obligations if default provisions are triggered and outstanding debt becomes due. It has a $50 million second lien facility from Farallon Capital Management and a revolving loan facility with Wells Fargo as agent.
GoPro has engaged consultants to evaluate strategic alternatives, including a potential sale or merger. It is also exploring defense and aerospace opportunities.new markets and product categories.“The company already announced plans to cut 23% of its global workforce in April.
The defense direction resonates with Faraday Future’s robotics: a financially strained consumer electronics company reaching into a higher-margin, government-funded market where competitive dynamics are different. Whether GoPro’s robust camera expertise translates into defense contracts remains unproven.
The only near-term supply assistance comes from China. ChangXin Memory Technologies’ DRAM has appeared in Corsair’s retail DDR5 kits. But CXMT also plans to convert 20% of its capacity to HBM because the margins are compelling. Consumer memory deficits are structural, not cyclical.
The memory crisis is evident in consumer electronics. The Asus ROG NUC 16 costs $1,200 more than last year’s model, partly due to DDR5 pricing. Dell increased laptop prices by 15-20% in December. Apple agreed to pay Samsung a 100% royalty on LPDDR5X for the iPhone. These companies can bear the costs. GoPro can’t.
GoPro was founded in 2002 by Nicholas Woodman. In 2014, it went public with a value of 3 billion dollars. The company popularized the action camera category and created a brand synonymous with extreme sports and adventure content. Its stock price rose above $90 in 2014. It is trading below $1 today.
The persistent concern alert makes GoPro the most visible corporate casualty of AI memory reallocation. It won’t be the last. Any consumer electronics company with thin margins, limited purchasing power and a reliance on commodity DRAM faces the same reckoning. The AI boom has created huge fortunes for the three memory makers and the hyperscalers they supply. GoPro is on the other side of that equation.
