Shareholders say execs didn't disclose important information.
Just when it looked like things couldn’t get any worse for GoPro, an investor this week smacked the camera maker with a lawsuit that alleges executives harmed shareholders by masking information about the company’s struggles.
In a complaint filed in California federal court, Joseph Bodri says GoPro GRPO misled investors about the poor sales of the company’s new Hero4 Session camera, and then did so again in regard to projected 2016 first quarter sales. GoPro’s eventual disclosure of the news caused its share price to tumble 15% and 28% respectively.
The complaint, which calls a judge to grant class action status, claims the company violated securities laws by carrying out so-called “fraud on the market.” It seeks an unspecified amount of damages for anyone who purchased GoPro shares between July 21, 2015 and January 13, 2016.
GoPro did not immediately respond to a request for comment.
Shareholder class action suits are not uncommon when bad news causes a stock price stumble; the cases, however, typically result in a quiet settlement and little or no money for investors. In a similar lawsuit earlier this week, shareholders sued Fitbit over a share price drop tied to the wearable maker’s allegedly faulty heart monitoring device.
For GoPro, whose wearable cameras once made it a darling among investors and the tech crowd, the new lawsuit caps a disastrous six months for the company.
A recent share price meltdown means GoPro stock is now bumping around the $11 mark, which is ways down from a recent high of near $65 last summer, and a record high of $93.85 in October of 2014.
The company, which announced significant layoffs this week, is also facing a patent infringement suit from camera rival Canon.
Meanwhile, GoPro CEO Nick Woodman is raising eyebrows with a reported purchase in December of a 180-foot yacht.
Here’s the lawsuit if you want to read it for yourself: