Cramer Does It Again: Camera-On-A-Stick Crashes 30% After Slashing Guidance, Cuts 7% Of Jobs

Who could have seen this coming? Week after the CEO ordered his mega-yacht and 6 months after Jim Cramer said “it was going higher,” GoPro (GPRO) slashed Q4 revenue guidance by 15% (from $510.9mm to $435mm) and has decided to lay off 7% of the workforce. For now, GPRO is halted… but Ambarella is not (and is collapsing 6% after hours) leaving them down 65-80% since Cramer said “buy buy buy.”

Camera-On-A-Stick Statement:

GoPro, Inc. reported certain preliminary financial results for the fourth quarter and year ended December 31, 2015.

GoPro expects revenue to be approximately $435 million for the fourth quarter of 2015 and $1.6 billion for the calendar year. Fourth quarter revenue reflects lower than anticipated sales of its capture devices due to slower than expected sell through at retailers, particularly in the first half of the quarter. Fourth quarter revenue includes a $21 million reduction for price protection related charges resulting from the HERO4 Session repricing in December. Non-GAAP gross margin for the fourth quarter of 2015, excluding the impact of price protection and a charge of between $30 million and $35 million to cost of revenue for excess purchase order commitments, excess inventory, and obsolete tooling is anticipated to be between 44.5% and 45.5%. Non-GAAP gross margin for the fourth quarter of 2015 is anticipated to be between 34.5% and 35.5%. Non-GAAP operating expenses for the fourth quarter of 2015 are estimated to be between $150.0 million and $152.5 million. Cash, cash equivalents and marketable securities at December 31, 2015 totaled approximately $475 million.

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Reallocation of Resources
Over the past two years, GoPro’s headcount has grown by more than 50% annually, to more than 1,500 employees at the end of 2015. To better align resources to key growth initiatives, GoPro has implemented a reduction in its workforce of approximately 7 percent. The Company estimates it will incur approximately $5 million to $10 million of restructuring expenses in the first quarter of 2016, substantially all of which will be severance costs.