Why GoPro stocks erupted today
Go Pro (NASDAQ: GPRO) stocks are going higher today, but that’s not due to company-specific news. As the trading session ended at 4:00 p.m. EDT, shares of the action camera maker were 12.7% higher on that day.
Without news on the company itself, today’s action is likely to come from retail day traders. GoPro is one of Robinhood’s 100 most popular names, and many followers of Reddit’s WallStreetBets forum are also users of the Robinhood trading app.
Image source: Getty Images.
Additionally, the retail crowd seems to expand beyond the simple GameStop (NYSE: GME), AMC Entertainment (NYSE: AMC), and a few more today. Clover Health Investments (NASDAQ: CLOV) more than doubled at one point today as traders look to increase stocks of companies with strong interest in short stocks. As of May 14, GoPro had about 14% of its outstanding shares short, according to MarketWatch. Today’s trading volume was also 170% above its two-month average before the close.
As with all other memes stocks with artificial price movements driven by short-term traders, this too will pass. Ultimately, investors will do their best to gauge the stock based on GoPro’s activities. This business is in a bit of a transformation.
GoPro hasn’t reported a profitable year since 2015, and the company reported a net loss of $ 10 million for the first quarter of 2021. But it changed its business to become more of a direct-to-consumer subscription business. for its users and Fans. GoPro.com generated 40% of total revenue in the first quarter, with that revenue more than tripling from the previous year.
If GoPro can continue to expand its reach online, it could at least return to profitability and justify a rise in the share price. It’s not today, however, as retail traders are simply looking to fend off short sellers.
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