GoPro exits drone market and slashes jobs amid sales warning

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Near 2010 GMT, shares of GoPro were down 13.5 percent at $6.52 after falling as low as $5.04 earlier in the session.

GoPro is killing its drone business and slashing 20% of its staff after reporting weak demand for its products.

GoPro unveiled its much-rumored Karma consumer drone in late 2016 and released it a few months later.

For the forth quarter of 2017, the company expects revenues of about United States dollars 340 million.

The company now expects fourth-quarter revenue of US$340 million, compared with its projection of US$470 million, plus or minus US$10 million, in November.

Short-sellers had raked in $45.4 million in mark-to-market profits before the report that the company may be trying to find a buyer.

Even though GoPro is exiting the drone business, drone makers such as DJI might be interested in the company purely for its cameras, which could be packaged with their drones.

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GoPro will discontinue its Karma drone and exit the category.

Despite these changes, CEO Nicholas Woodman has said that "GoPro is committed to turning our business around in 2018", and "will continue to innovate with several new products aimed at new and existing customers". "We entered the new year with strong sell-through and are excited with our hardware and software roadmap".

The firm made the announcement on Monday as it warned investors of disappointing end-of-year results and layoffs.

Morgan Stanley said in a research note earlier Monday that the price cut for the Hero6 camera would make earnings growth hard in fiscal 2018.

In its statement today, GoPro also cited the hard regulatory regimes in the USA and Europe as the reason why it doesn't think the drone market will be lucrative in the long term.

Woodman plans to take a salary of just US$1 this year.

For now, the company appears to be doubling down on the one thing it does know how to do: make small action cameras.