should I invest in GoPro
Market Analysis

GoPro’s Stock Performance Is A Warning Sign For Retail Investors

On the eve of President Biden’s signing of his $1.9 trillion stimulus relief bill, there are worrying signs of more market volatility to come.

Just two days ago we discussed how stimulus checks could increase market volatility as retail investors pump their favorite stocks, but they’re not even in the mail yet and there are worrying signs. 

Case and point: GoPro (NASDAQ: GPRO)!

Why is GoPro stock up? 

Although GoPro has fallen 75% since 2015, it is not yet beyond a comeback. Much like GameStop prior to its infamous January short-squeeze, GoPro has been working tirelessly to rejuvenate its business:

  • By Q4 2020, total subscribers rose 145% year-over-year (YoY) to 761,000.
  • Revenue doubled YoY to $116 million. 
  • 91% of Q4 sales were made up of high-end, $300+ products.

Perhaps if GoPro keeps this up for a few more quarters, we can call it a comeback. However, it doesn’t justify what may be about to occur. 

GoPro shares have risen 15% this week, and 12% yesterday alone, despite absolutely no company-related news whatsoever. However, with a relatively high short interest ratio of 10% and the resurgence of Reddit’s WallStreetBets in recent weeks, we may be able to piece the dots together. GoPro could be in for a short-squeeze akin to GameStop’s.

We’ve already seen heavily shorted stocks rise substantially this week — GameStop’s up more than 100% — so the risk of volatility is still very much there. When $1,400 stimulus checks begin rolling in, the short-squeeze will only get worse. Don’t forget that the vast majority of retail investors caught up in January’s squeeze ended up losing big and gambling away their hard-earned money. 

Investing is a long-term play and the surest way to generate wealth, so don’t forget:

  • Buy what you believe in.
  • Diversify.
  • Never borrow to buy.
  • and invest what you can, when you can.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here

Jamie Adams
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.