Stock for Foxconn-invested GoPro soars by 49 percent in two days since IPO

4 Jul

The stock value for American wearable camera maker GoPro, Inc. was up by 49 percent after two days of trading since its initial public offering (IPO) on June 26. It increased by 14.1 percent and closed at US$35.76 on the second trading day. The company initially priced its IPO at US$24 per share.

According to Thomson Reuters, the company was valued at US$4.4 billion based on the closing price on June 27.

Cnbc.com reported on June 28 that GoPro, which raised US$400 million in IPO, set the largest IPO record in the United States among consumer electronics firms over the last two decades.

Nicholas Woodman, chief executive of GoPro, pointed out that his company’s goal is to develop products that not only help camera lovers capture their best moments, but also give them a way to summarize and share their experience. Woodman is implying that his company would transform itself from a hardware vendor into a tech firm that integrates software and application. At the moment, GoPro’s Hero3 series are priced at US$199-399.

Based on the disclosed data, GoPro has P/E ratio (price-earnings ratio) of 80 on day one of trading. In comparison, Apple Inc., Canon and Nikon each had a P/E ratio of around 15, reported The Wall Street Journal on June 26.

According to GoPro’s IPO prospectus, the company plans to branch out into the media sector and produce and sell original content. In the first three months of 2014, GoPro’s spending on research and development took up 12 percent of its revenue, which was higher than the 5 percent recorded a year ago. Its gross profit margin over the last nine quarters was above 40 percent on average.

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Foxconn

Taiwan-based Foxconn announced on Dec. 19, 2012 that its subsidiary Foxteq Holdings Inc. bought 11,709,351 shares (or 10.7%) of Woodman Labs, Inc., which later became GoPro in February 2014, for US$17.0804 per share.

According to documents filed with the U.S. Securities and Exchange Commission (SEC), GoPro’s five major investors, namely Riverwood Capital LP, Steamboat Ventures, Sageview Capital Partners LP, U.S. Venture Partners and Foxteq, reported profit of 661.6%, 661%, 660.5%, 660% and 28.5%, respectively, according to a report by fool.com on June 26.

The report said that Foxteq’s shares in GoPro are diluted to 10 percent after the camera maker’s IPO.

Aside from profiting from investment, Foxconn has started getting results from the research and development area.

Based on Envision IP statistics, Foxconn was the top-20 U.S. patent holders in 2013, as reported by The Wall Street Journal on June 27. Foxconn sold its Head-Mounted Display (HMD) technology patent to Google last year. Sources said that Foxconn is investing in biometric sensors technology for wearable devices. Foxconn Chairman Terry Gou said in October last year that the company had filed 300 patent applications for face recognition-related technology.

Foxconn was granted 2,279 patents by the United States Patent and Trademark Office in 2013, making it the only Taiwanese firm to have made it to the top-ten list in terms of the number of U.S. patent approval, according to the IFI CLAIMS Patent Services, a leading producer of global patent databases and analytic solutions as well as a division of Fairview Research.

Its ranking last year was higher than that of Google (11th) and Apple Inc. (13th). Foxconn was in eighth place in 2012 and was the only Taiwanese company that made it to the top-50 in 2011.

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