The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) demand for the GoPro brand had dramatically declined and retailers were not stocking up for 2017 holiday sales to the extent GoPro had budgeted for; (ii) demand for GoPro's Karma drones was sufficiently weak that the Company could no longer afford to manufacture and sell them profitably; (iii) the Company would be forced to dramatically slash prices on its newly launched HERO6 Black and its dated HERO5 Black and HERO5 Session cameras, as well as its Karma drone, during the quarter and would need to further slash HERO6 prices in January 2018; and (iv) as a result of the foregoing, GoPro was not on track to achieve the financial results it had led the market to believe it was on track to achieve during the Class Period.On Monday, January 8, 2018, before the open of trading, GoPro issued a press release filed on Form 8-K with the SEC entitled "GoPro Announces Preliminary Fourth Quarter 2017 Results," revealing that its fourth quarter 2017 sales were $340 million, significantly below analysts' projections of over $470 million. GoPro blamed the results on the slashing of prices for its HERO6 Black, HERO5 Black, and HERO5 Session cameras, as well as its Karma drone, during the quarter, which the Company had been forced to engage in to move inventory and which had a negative $80 million impact on revenues. GoPro also disclosed it was cutting more than one-fifth of its workforce and exiting the drone market altogether, requiring it to dump the rest of its Karma drone inventory. GoPro had cut the price for its HERO5 Black camera in December 2017 and announced it was now reducing the price of its newly launched HERO6 model to $399 from $499. The workforce reduction would cost GoPro $33 million, mainly in severance costs.
On this news, GoPro's stock price declined, falling from a close of $7.52 per share on January 5, 2018, to trade as low as $5.04 per share in intraday trading on January 8, 2018, before closing at $6.56 per share on unusually high trading volume of more than 59 million shares traded.The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.