Rumors that Apple could buy GoPro caused the action camera maker’s share price to surge on Thursday. Despite a 45 percent drop over the last few months, GoPro stock surged 16 percent after an Apple buyout was reported for the second time in three months.
FBR & Co. analyst Dan Ives told investors that buying GoPro would “make sense” for Apple as the worldwide smartphone market becomes increasingly saturated. “We believe GoPro would fit like a glove into the Apple product portfolio,” he wrote.
Ives’ comments come months after Northland Capital analyst Gus Richard said GoPro would be a “compelling acquisition target” for Apple — not only for its hardware, but also its software.
“As of Wednesday’s close, shares of GoPro were down 82% from their all-time high of $93.85 reached on October 7, 2014,” reports MarketWatch. “Half of that value has been lost since August, with short interest on the stock, or a bet by investors that the stock will fall, reaching record highsin November.”
There has also been concern that GoPro sales will be weak this holiday, while analysts expect their to be unusually high levels of discounts on GoPro products versus other electronics.
However, thanks to Thursday’s surge, GoPro’s market cap has been pushed up to $2.6 billion. Apple had $203 billion in cash equivalents when it announced its most recent earnings.
Acquiring GoPro wouldn’t exactly put much of a dent in Apple’s bank balance, then, and many believe that the company’s hardware and special editing software could be valuable for Apple — especially as some competitors are already investing in this area.
GoPro’s technology could give Apple a shortcut into virtual reality, which HTC, Facebook, Sony, Microsoft, and others are now competing. GoPro is also about to enter the drone business, having teased its first drone, Karma, which is set to go on sale in early 2016.
“In our opinion, Cook & Co. need to make an aggressive move in this area in 2016,” Ives concluded.
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