Will GoPro (GPRO) Take the On-Officer Camera Market by Storm?
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Since the unfortunate events surrounding the fatal shooting of Michael Brown in Ferguson, Missouri, on August 9th, one theme has played out well among stock traders - on-officer cameras. Not only could an on-officer video device potentially recorded what transpired that fateful night, but research has shown that police agencies that have trialed or fully deployed on-officer video have seen a 59% reduction in “use of force” by officers. Traders see the outfitting of millions of police officers around the world as a mega boon for companies involved.
Two companies that have benefited greatly from the speculation around on-officers cameras are TASER International (Nasdaq: TASR) and Digital Ally (Nasdaq: DGLY). Both companies have on-officer camera products in the market currently. TASER, which is well-known for its non-lethal guns, has seen its shares rally 26% since the Ferguson events. Meanwhile, Digital Ally, which provides dash cams for police cars, has seen its stock surge 456% since the events. Another stock that has been quietly picking up momentum on the same theme is GoPro (Nasdaq: GPRO). While traders may not automatically think of GoPro as a go-to play on the theme, it is clear speculators have been snapping up the shares on the potential the company could enter the market.
There is no doubt GoPro has been a hot stock since its June 26th IPO, but shares of the video camera maker exploded on Thursday and Friday of last week on no news. Shares rose 7.5% on Thursday on volume that was 5.6x the prior day's volume. On Friday, shares added 6%, again on heavy volume. With no news in the market, these gains appear to be tied to retail traders playing the stock on hopes the company will enter the red-hot on-officer camera market.
Entering the on-officer camera market, on the surface, would appear to be an easy extension of the GoPro's current camera offerings. In fact, third parties already appear to be selling GoPro devices for the police market. There's the GoPro Tactical Police Mount, which was being sold on eBay, although that no longer appears to be the case. Also, there are various reports of officers rigging themselves up with GoPros. In a February 2014 story, it was noted that Lafayette, Colorado officer Dan Tipton "wears a version of the popular square, chest-mounted GoPro camera." The department doesn't have the funding to outfit its officers, so six of Lafayette's 40 officers wear cameras they bought and own. In addition, there was a formal announcement from the company in May 2011 related to the company launching military and civil service helmet mounts for the HD Hero Line of cameras.
While it is clear GoPro is not completely ignoring this potential market, the company does not currently have a product on the market and has no future plans to enter it. Of if they do, they are not talking.
An e-mail exchange between StreetInsider.com and GoPro's media head, Jeff Brown, on Monday confirmed the company has no product or announced plans to enter the market. However, the response may have left more questions than answers. The exchange went like this:
Q: Does GoPro currently have an on-officer (police) type camera product? If not, does the company have any intentions of entering this market?
A: Nothing to date
Q: Thanks for the response. Does that mean no current plans to enter this market?
A: That’s all I can tell you. No news to date.
Meanwhile, analysts on Wall Street see the idea of GoPro entering the market as "far fetched. In an e-mail comment to StreetInsider.com, Dougherty & Co.'s analyst Charlie Anderson said, "The whole idea sounds a little far-fetched to me because the market seems 1) too small 2) to demand an always-on solution vs. GoPro’s tradeoff of amazing video quality for 3 hours of recording time. What TASR makes seems more relevant."
Shares of GoPro are adding to last week's gains in pre-open trading, last up 1.9% to $52.80.
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