GoPro, the action-camera maker, has agreed to be acquired by Starman Optical, a privately held S. firm that produces optical transceivers for AI data centers, in a deal valued at US$285 million in cash. The transaction, announced Tuesday, will give Starman a 90 per cent stake in GoPro, with existing shareholders retaining the remaining 10 per cent.

The companies said in a joint statement that the deal would better position GoPro to capitalize on its portfolio of more than 2,500 S. patents, including in optics and imaging, by tapping into commercial, defense, and AI markets. Starman will also add its optical transceivers—components that allow networking equipment to transmit data using light—to GoPro's product lineup. The companies also indicated they aim to bring production of some crucial optical equipment back to the , though no timeline was provided.

Stock Market Reaction

GoPro's shares surged more than 50 per cent on the news, trading at US$1.33, surpassing the US$1.14-per-share offer price, which represented a premium of about 29.5 per cent over its previous close. That could suggest investors are anticipating a higher bid, according to analysts. Forbes reported that the merger sent GoPro's stock soaring 40 per cent.

GoPro, which had a valuation of US$4 billion on its first trading day in 2014, has seen its stock lose around 96 per cent of its value since then. The company has faced mounting competition from Chinese rivals such as DJI and Insta 360, and its revenue in the June quarter was down more than 80 per cent from a peak of US$633.91 million in the last three months of 2014.

Strategic Shift and Future Plans

As part of the deal, GoPro plans to expand into producing technology for AI, defense, robotics, and aerospace, according to Forbes. The company said it would continue to "fully support" its consumer products. This pivot mirrors moves by other companies, such as sneaker maker Allbirds, which rebranded as AI infrastructure company "Smartbird" in a similar shift, though its stock has continued to struggle.

The deal comes as GoPro faces headwinds from surging memory chip prices, driven by Big Tech's AI infrastructure expansion, which forced the company in June to warn of substantial doubt about its ability to continue as a going concern. The company has about US$92 million of outstanding debt, which will be repaid as part of the transaction.

Outlook

GoPro will remain publicly listed after the deal closes, which is expected by the end of the year. The acquisition is seen as a lifeline for the camera maker, providing it with the financial stability and strategic direction to navigate a challenging market landscape.