Shares of GoPro Inc have jumped 23 per cent to $16.78 in early trading on Tuesday after the action camera company surprised investors with its plans to shift away from hardware production.
In a securities filing on Monday, GoPro said it planned to shift toward distributing and selling directly to consumers and part ways with Google and others who help to distribute its products and provide marketing support.
The company, which hopes to ramp up revenues from sales of spherical cameras, air drones and a software platform for filmmakers, said it would lay off roughly 1% of its workforce, or less than 30 employees.
“No longer affected by any department and not directed in any way by category. Support for cameras, drones, software, entertainment and storage will all decline,” a GoPro spokesman said.
JPMorgan analyst Stephen Ju said GoPro may be testing the water with its shift to a direct model in some markets to see if its expanded retail channel can improve its performance.
Analysts said it was a smart decision and could boost demand for GoPro’s products as it will be more responsive to the market’s needs.
“We believe that the departure of Google and others aligns GoPro with key distribution partners… and … with in-store sales specialists,” Mizuho analyst Betty Chen wrote in a note.