6 days ago
GoPro Stock Wants to Be the Next Big Meme Investment. Why You Shouldn't Touch GPRO with a 10-Foot Pole.
GoPro (GPRO) shares rallied as much as 70% on Wednesday morning as retail investors on online forums, including Reddit, lit up with enthusiasm for the struggling camera brand.
Meme stock enthusiasts went after GPRO this morning as nearly 10% of its float was sold short heading into today. Plus, the nostalgic brand appeal added fuel to the speculative fire as well.
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While GoPro stock has since reversed intraday gains, it was seen trading at about 5x its price in early April at market open.
Risks of Owning GoPro Stock Amid Meme Stock Frenzy
Today's price action in GPRO shares sure is tempting for momentum chasers, however, caution is warranted as meme stock rallies fueled by social media hype often lack staying power.
Since it wasn't strategic developments or earnings strength that caused the stock to soar this morning, GoPro remains in limbo in terms of offering long-term conviction.
Therefore, for investors, jumping into GoPro stock now could be like chasing a runaway train – exciting, but potentially disastrous if sentiment turns.
As history has shown numerous times with meme stocks, what goes up fast can come down even faster.
Profitability Remains a Challenge for GPRO Shares
Investors are recommended caution in owning GoPro shares amid the meme stock frenzy as the action camera maker's financial health remains a major concern.
GPRO stock has traded well below $1 for much of this year, reflecting broader skepticism about its growth prospects and profitability.
Additionally, revenue has stagnated (down 14% on a year-over-year basis in Q1) due to stiff competition in the consumer electronics space as well.
In short, for long-term investors, the disconnect between price and performance of the San Mateo-headquartered firm should serve as a huge red flag, irrespective of how meme stock enthusiasts are treating it.
Wall Street Sees a Massive Crash in GoPro Ahead
Another reason why you shouldn't touch GoPro stock with a 10-foot pole is Wall Street's view on the Nasdaq-listed firm.
The consensus rating on GPRO shares currently sits at 'Strong Sell' with one analyst in coverage. That analyst has a price target of $0.30 only, indicating downside potential of more than 80% from current levels.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
