Could This Partnership Save GPRO Stock?
Beleaguered GoPro Inc (NASDAQ:GPRO) may have finally found a way to recoup its losses. Holders of GPRO stock must take note of GoPro’s new move.
Before I get to it, let’s travel back in time to see why this new venture matters so much.
Toward the end of 2014, GoPro stock was making its way to the $100.00 mark. The company was at the peak of its business. GoPro had successfully managed to build a strong brand and everything was working well in its favor.
But come 2015, the management failed to anticipate the inevitable. Business 101 teaches us that strong branding always needs the support of a good marketing strategy. Sadly, GoPro didn’t have one in place.
GoPro has a peculiar business. The company relies on a single source of revenue. There’s zero diversification. GoPro has only one product line—that is, its action cameras. If the cameras don’t sell, the company goes out of business. This is why it’s so often called a “one-trick pony.”
But to sell, the company must have a strong marketing campaign working in the background. This is where it has been largely lacking. Recall that the company cited its underfunded marketing campaign to the bane of its success. Since the “Hero4 Session” disappointed the market, GPRO stock has been in a perpetual decline.
But the good news is that GoPro’s management has finally paid heed to stockholders’ woes. The company is now spending its dollars on meaningful partnerships that will help market its cameras to its actual target market—the outdoorsy action-camera enthusiasts.
GoPro has just entered into a sponsorship agreement with the world’s biggest bass fishing tournament organizer, Fishing League Worldwide (FLW). (Source: “GoPro (GPRO) to Become ‘Official Camera’ for FLW,” StreetInsider.com, March 10, 2016.)
Under the agreement, GoPro’s cameras will be worn and officially promoted by the professional anglers in this season’s FLW tournament.
And here’s the best part…
FLW will also be featuring the yet-to-be-released “GoPro Karma” at the tournament. Yes, GoPro’s much-anticipated drone camera will be covering the whole event.
It seems like this lost wayfarer is finally back on track.
The Bottom Line on GPRO Stock
GoPro’s management has finally awoken from its deep slumber. GoPro is now out fishing for meaningful partnerships and celebrity endorsements that can genuinely help boost sales. Albeit small, GoPro’s partnership with FLW is an important step in the right direction. The company needs to push for more of such partnerships.
It’s agreeable that sponsorship expenses will probably hit the company’s bottom line in the short term, but in the long term, they will certainly boost sales. This is the kind of marketing strategy GoPro needed from the beginning.
Well, better late than never.
Long story short, this is an interesting development for the company and will likely help lift GPRO stock once the venture starts converting sales.