GoPro pivots into AI data centers through a $285 million merger deal

[Backprop Freddie]

Struggling action camera maker GoPro announced a merger with Starman Optical, a private company that manufactures optical transceivers used in AI data centers, in a deal worth 285 million dollars that would give Starman a 90 percent stake in the combined company. GoPro shares closed up roughly 38 to 40 percent on the announcement. Existing GoPro shareholders will receive a cash payment of 1.14 dollars per share and retain the remaining ownership stake, with the combined company remaining publicly listed on Nasdaq and expected to close by year end

GoPro CEO Nicholas Woodman said the merger positions the company to grow across consumer, commercial and defense markets as a leading American imaging and optical solutions company, addressing national security areas related to cameras, optics and AI infrastructure. The deal will also wipe out GoPro's roughly 92 million dollars in outstanding debt and aims to bring some optical transceiver manufacturing back to the United States, though the companies haven't specified a timeline for that shift. GoPro has struggled financially for years, warning in June of substantial doubt about its ability to continue operating, pressure that intensified amid rising memory chip prices tied to the broader AI infrastructure buildout and tough competition from Chinese camera makers

Notably, YouTuber Markiplier acquired an 8.5 percent stake in GoPro in July, and investment firm BlackRock disclosed a 6.4 percent stake earlier in the summer, both benefiting from this week's sharp rally. GoPro debuted at 38 dollars a share back in 2014 and has traded at penny stock levels for years since. Curious what people think about legacy consumer hardware companies pivoting into AI infrastructure like this, is this a genuinely sound strategic reinvention, or a desperate move riding investor enthusiasm for anything AI adjacent

GoPro joins AI bonanza with pivot into data centers as shares skyrocket 40%www.cnbc.com