Key Takeaways:
GoPro founder and CEO Nicholas Woodman agreed to provide $20 million in financing to the company through senior secured notes and warrants, the action-camera maker said Wednesday.
"An independent committee of the board of directors evaluated a range of financing options and concluded this structure offered the most favorable terms for GoPro and our shareholders," Woodman said.
The financing will be issued via entities affiliated with Woodman and includes warrants to purchase shares of the company's Class B common stock. The transaction is subject to certain closing conditions. GoPro shares rose 5% in after-hours trading to around 77 cents, paring some of the 4.2% gain during the regular session.
The CEO's personal infusion signals the company faces challenges securing external financing as it burns through cash. GoPro has been evaluating strategic alternatives since May 11, a process Woodman said "continues to progress." The warrants could dilute existing shareholders if exercised, though the company did not disclose the number of shares underlying the warrants or the exercise price.
Additional details are available in GoPro's Form 8-K filed with the Securities and Exchange Commission. The independent committee evaluated multiple options before selecting Woodman's proposal, the company said. GoPro, which trades on the Nasdaq under the ticker GPRO, has seen its market value shrink as competition from smartphone cameras and cheaper rivals eroded its market share.
The financing gives GoPro near-term liquidity to continue operations while it explores a sale or other strategic options. Investors will watch for updates on the strategic review, which has no set deadline.
This article is for informational purposes only and does not constitute investment advice.
