According to the law firm press release, GoPro develops and sells mountable and wearable cameras and accessories in the United States and internationally. The Company’s cameras are designed primarily for filming while immersed in action, such as outdoor or extreme sports. On October 23, 2016, following months of delays, GoPro released the Karma drone, a compact, foldable drone designed for aerial photography using GoPro’s cameras.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) GoPro’s Karma drones were prone to losing power midflight, causing them to fall out of the sky; (ii) the Company had thus significantly overstated the utility of and likely customer demand for the Karma drone; (iii) the foregoing issue, when publicly known, would necessitate a costly recall of the Company’s Karma drones; and (iv) as a result, GoPro’s public statements were materially false and misleading at all relevant times.
On November 3, 2016, shortly before the market closed, GoPro issued a press release and filed a Current Report on Form 8-K with the SEC announcing the Company’s financial and operating results for the quarter ended September 30, 2016 (the “Q3 2016 8-K”). Among other information, the Q3 2016 8-K provided revenue guidance for 2016 in the range of $1.25 billion and $1.3 billion—a significant decrease from the revenue guidance of $1.35 billion and $1.5 billion that the Company had provided in reporting its financial and operating results for the previous quarter, and consistent with an anticipated recall of the Company’s Karma drone.
On this news, GoPro’s share price fell $0.90, or 7.01%, to close at $11.94 on November 3, 2016, and fell an additional $0.78, or 6.53%, to close at $11.16 on November 4, 2016.
On November 8, 2016, post-market, GoPro announced the recall of the approximately 2,500 Karma drones purchased by consumers since the product’s release, advising that the Company had discovered that Karma units were prone to losing power during operation.
On this news, GoPro’s share price fell $0.45, or 4.14%, to close at $10.41 on November 9, 2016.
On February 6, 2017, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an Amended Complaint on March 14.
The Defendants filed a Motion to Dismiss on April 13, 2017. The Court denied the Motion on July 26. Lead Plaintiff filed a Second Amended Complaint on August 4. On February 14, 2019, the parties entered into a Stipulation of Settlement. The Court granted preliminary approval of the Settlement on April 26.