M&A Rumors: Why GoPro Inc (GPRO) Stock Is Jumping Today

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GoPro Inc (NASDAQ:GPRO) shares were soaring on Thursday as the company was at the center of a rumor regarding a potential buyout from a major Chinese company.

GoPro Inc (GPRO)
Source: GoPro

The personal camera maker is reportedly being considered for an acquisition from Chinese electronics maker Xiaomi Corp. The latter is currently pondering whether or not it wants to make an offer rot the action-camera maker.

GoPro CEO Nick Woodman had previously expressed that he would be willing to listen to a buyout deal and even hired investment bank JPMorgan Chase & Co. (NYSE:JPM) to advise it on the terms of a potential sale. While such a deal may be good for the company, it may not be as lucrative as it once might have been.

GoPro currently has a market capitalization of about $761 million, which is a considerable drop from its previous valuation of $10 billion. However, if Xiaomi decides to pounce on this opportunity, it could help both companies as Xiaomi could leverage the GoPro brand and gain profit contributions from device sales, according to analysts who have studied the matter.

The Information predicts that the camera maker could fetch as much as $1 billion. Xiaomi is considering an offer, but the company has said that it does not want to overpay on a company that has been on the decline, according to the same publication.

GPRO stock was up about 4.75% on Thursday on the news.


Article printed from InvestorPlace Media, https://investorplace.com/2018/04/gopro-inc-gpro-xiaomi/.

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