GoPro's $285 million sale to Starman: Take two for the action camera

GoPro – the camera that made us all feel like action heroes – is being bought by a little-known optical maker called Starman Optical for $285 million in cash.

Inextricably linked with POV culture, GoPro's meteoric rise around its 2014 IPO, when it hit a $4 billion valuation, was followed by a spectacular crash-and-burn when it tried to cash in on the pop phenomenon, billing itself as the "content kingmaker" of the previous decade – and a downward stock spiral that wiped out 96% of its value.

The deal, announced on Tuesday, gives Starman – a privately held firm that makes optical transceivers in the US for use in AI data centers – a 90% stake, with existing shareholders keeping the rest.

The cash injection will help GoPro plug a $92 ​million debt hole, and ​navigate surging chip prices and mounting competition from Chinese rivals such as DJI and Insta 360.

The companies said the deal would better ​position consumer-reliant GoPro to capitalize on its more than 2,500 US patents, including in optics ⁠and imaging, by tapping the commercial, defense and AI markets.

GoPro shares rallied ​more than 50% on the news to trade at $1.33, above the $1.14-per-share offer price – ​a premium of about 29.5%.

That could suggest investors are expecting a higher bid.

Revenue in the ‌June ⁠quarter was down more than 80% from a peak of $633.91 million in the last three months of 2014.

A surge in memory chip prices, driven by Big Tech's AI infrastructure buildout, has added to the pressure, forcing GoPro to warn of "substantial doubt" about its ​future in June.

As part ​of Tuesday's deal, Starman ⁠will add its optical transceivers – components that let networking equipment send data using light – to GoPro's portfolio.

The companies also said they would ​aim to bring some optical equipment production back to the ​US, without ⁠specifying a timeline.

A clutch of companies including Allbirds, now known as Smartbird, have pivoted to AI in recent months, attracted by a surge of investment in the industry.

Unlike some of them, GoPro ⁠will ​continue with its consumer business.

The company will also remain publicly listed after the deal closes, expected by the end of ​the year.