GoPro has hired JP Morgan to put itself up for sale

GoPro exits drone market and cuts jobs after poor 2017 earnings

"GoPro is committed to turning our business around in 2018", Woodman said in a statement on the company's website.

In a day of dramatic developments for the action camera maker, GoPro has announced it is leaving the drone market and its CEO has effectively put the company up for sale.

GoPro has hired J.P. Morgan Chase to help it seek a potential sale, according to people familiar with the matter. GoPro declined to comment.

In addition to exiting the drone business, the company is laying off 20% of its workforce, or about 250 employees. Mostly, however, they cited the fierce competition in drone manufacturing as the reason the Karma has failed. Hostile regulatory environment in Europe and the United States has also weighed upon its decision.

GoPro's reasoning behind the departure stems from what they are calling an "extremely competitive" drone market.

Morgan Stanley said in a research note yesterday that the price cut would make earnings growth hard in fiscal 2018. Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier.

The company now expects fourth-quarter revenue of US$340 million, compared with its November projection of US$470 million, plus or minus US$10 million. The job cuts and business restructuring will result in an estimated charge of $23 to $33 million, most of which will be recognized in the first quarter, the company said.

GoPro is now also facing financial trouble, with the company laying off staff and reducing the salary of CEO Nicholas Woodman, to $1.

"Cutting costs is a good move, although now it's about if the company can turn this ship around themselves", Daniel Ives, analyst at GBH Insights, said. It's also reducing CEO Nicholas Woodman's pay to $1 as it flounders with its less than stellar numbers.

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