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GoPro Sets IPO Price Range In Amended S-1

NEW YORK (TheStreet) - GoPro, the maker of durable digital camera that can be used to capture adventure sports, is seeking a valuation of about $3 billion in its initial public offering on the Nasdaq.

Also See: GoPro Files for IPO As Sales Top $1 Billion

The fast-growing action sports camera company said in an amended S-1 filing with the Securities and Exchange Commission on Wednesday it would look to sell over 17.8 million shares for between $21-and-$24 a share apiece, raising over $427 million at the high-end of its IPO price range.

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One-half of the proceeds from the offering will be used to cash out some existing GoPro investors, while GoPro is expected to receive $183.1 million in net proceeds at the midpoint of its IPO price range. Those funds will be used to repay GoPro's $120 million term loan and for general corporate purposes, the company said in the S-1.

Currently, the vast majority of GoPro's revenues come from the sale of its HERO3 and HERO3+ cameras, in addition to accessories like Wi-Fi remotes, batteries, and camera mounts. In 2013, GoPro reported $985 million in sales, a near doubling from 2012 levels. Net income at GoPro also nearly doubled to $60.5 million.

However, revenue growth slowed in 2013, and the company's prospectus shows that revenue actually fell about 7% in the first quarter of 2014 to $235.7 million. Revenue did grow during the fourth quarter, buoyed by holiday sales.

As part of GoPro's offering, the company presents itself as a fledgling powerhouse in traditional media and social media, where its cameras might be used to capture adventure sports and live-action content. GoPro has recently built a team of production professionals to produce content from the company's cameras and the company said in its prospectus it is looking to curate such content over its branded GoPro Newtork and social media channels on Facebook (FB), Instagram, Twitter (TWTR) and YouTube.

Already, GoPro has signed a partnership with Microsoft's (MSFT) Xbox unit that will create a video channel and advertising opportunities and it also counts Virgin America as another partner.

Dual Class Stock, JOBS Act

The company will list with a dual class stock structure, which means founder and CEO Nicholas Woodman will have control of the company's voting rights. Class B shareholders will be entitled to 10 votes per one Class A share.

GoPro, while it neared $1 billion in revenue in its last calendar year, is seeking to list its shares as an "emerging growth company" under the Jumpstart our Business Startups Act of 2012, otherwise known as the JOBS Act. That act exempts companies from some financial reporting requirements and applies to companies with less than $1 billion in annual revenue.

In GoPro's case, the company did not disclose all details surrounding executive compensation as a result of its JOBS Act exemption. GoPro did say CEO Nicholas Woodman earned $1.8 million in total compensation in 2013, split between an $800,000 base salary and a $1 million bonus. The company also said on June 3, Woodman was granted 4.5 million restricted stock units that vest if the company's stock reaches certain levels in coming years.


GoPro said in its prospectus it has 42 issued patents and 68 patent applications pending in the U.S., and 15 corresponding issued patents and 12 patent applications pending in foreign countries. Those patents include designs for camera's and software, in addition to physical structures, image processing, operational firmware and other types of software.

JPMorgan, Citigroup and Barclays will lead GoPro's IPO offering, while Allen & Co., Stifel, Baird, MCS Capital Markets, Piper Jaffray and Raymond James will also act as underwriters.

Also See: GoPro Files for IPO As Sales Top $1 Billion

-- Written by Antoine Gara in New York, with Whalen MacHale

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