GP GPRO GoPro, Inc. Loading... : Investor Sentiment and Bull/Bear Views

The author argues GoPro's proposed reverse merger with Starman Optical is structured to take 90% of the company private and would rob current shareholders of an impending financial turnaround, citing red flags in the deal timing and CEO incentives. They point to the new interchangeable lens camera selling out worldwide, convertible debt that converts into shares rather than requiring cash payouts, and operating losses partly from a temporary memory-cost spike as evidence the underlying business is more manageable than it appears. The catalyst is a minority shareholder vote or Delaware court challenge that could block the deal; if 41.5% of other minority holders vote no, the deal could fall apart and return full upside to remaining shareholders. Main risk: the deal may still proceed under DGCL 144(a) protections despite the author's claim that Delaware courts are likely to see through it.

Author argues GoPro's $50M Yorkville convertible debenture facility, with conversion price at the lower of $1.35 fixed or 98% of the lowest 5-day VWAP (floor $0.1736), gives the noteholder an incentive to convert and sell into strength since their cost basis floats down with the stock. He flags unusual short-availability data (shares-to-borrow swinging from 0 to 6M+) as worth watching alongside price action. The author is sarcastic about a 'guaranteed' $1.35 and predicts $3+ within 10 days, implying a squeeze setup. Main risk is the unpredictable timing of dilution versus a short squeeze.

GoPro borrowed $20M from Yorkville, a lender known for toxic, dilutive financing. The debentures convert into stock at a discount and are continuously sold into the market, creating relentless downward pressure. Short GPRO as toxic "death spiral" financing will continuously dilute existing shareholders. Low float or sudden buyout rumors could trigger a short squeeze.