Is GoPro doomed? Stock has been a huge dog

GoPro's CEO puts company's future in focus
GoPro's CEO puts company's future in focus

There goes my HERO?

GoPro (GPRO), maker of the HERO action camera, is in a losing battle with gravity. Its stock went way up after its blockbuster initial public offering in 2014 but it is now in the midst of a terrifying freefall.

And there seems to be no end in sight.

The stock has plunged 75% this year due to growing concerns that GoPro's products may just be a passing fad -- the high tech equivalent of a Pet Rock or Cabbage Patch Kid.

There's more competition now from the likes of Polaroid, Garmin (GRMN), Sony (SNE) and Chinese smartphone juggernaut Xiaomi.

Weak earnings guidance from GoPro (GPRO) chip supplier Ambarella earlier this month didn't help either. Analysts are now predicting that GoPro's sales will fall 17% in the fourth quarter.

It's never a good sign for a young company to be posting sales declines. But it's even worse when it's during the holidays -- usually the most wonderful time of the year for gadget makers.

Things got worse on Monday. Shares fell another 10% -- to their lowest level ever -- after Morgan Stanley analyst downgraded GoPro to an underperform. That's essentially a sell rating.

Related: GoPro grounded. Stock crashes below IPO price

This follows a downgrade by Citi analyst Jeremy David last week.

David expressed worries that GoPro may be having a tough time selling its newest cameras. He pointed to the fact that GoPro CEO Nick Woodman went on QVC to hawk them earlier this month.

That may seem like an act of desperation. Could you ever imagine Apple (AAPL) CEO Tim Cook going on QVC to plug the latest iPhone?

But to be fair, nostalgia may have been one of the reasons for Woodman's appearance. He went on QVC in 2005 -- shortly after the company was founded -- to promote its first product.

Talk about a trip back in time! It was a 35 mm waterproof camera that attached to your wrist. And used film! According to that QVC segment, Woodman's business role model was Steve Jobs and his philosophy was Yoda's "Do or do not. There is no try."

GoPro shareholders may disagree with the Jedi Grand Master though. They will want Woodman to try a lot harder to turn the company around -- especially when you consider just how much he's being paid to run GoPro.

As part of his compensation package, Woodman received a reward of 4.5 million restricted stock units.

He got 1.5 million shares the day of the IPO and the remaining 3 million were set to be awarded on a monthly basis depending on certain performance targets for the stock price. Those were met in January.

Related: Nick Woodman's huge compensation package was worth $285 million

The stock award was worth nearly $300 million at the end of last year. As a result, Woodman was the highest paid CEO in America for 2014.

But barring a miraculous comeback in the stock price, Woodman won't make anywhere close to $300 million this year.

Woodman also owns a 23% stake in the company through a trust with his wife that is currently worth about $570 million.

So it's clearly in Woodman's best interests to do something that can move the stock price higher.

But it's not certain whether new markets like drones, virtual reality and online media (GoPro has a popular YouTube channel) will be enough to get Wall Street excited again.

There was a brief respite from the selling last week after FBR analyst Daniel Ives suggested that GoPro could be a juicy takeover target for Apple. But the gains GoPro enjoyed from those rumors have quickly faded away.

With that in mind, maybe Woodman should do even more TV. QVC archrival HSN sells GoPro cameras too.

Hed: Should Apple buy GoPro?

Hed: We're witnessing a slow motion tech wreck

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