OK, reading patents is like reading riders to bills passed by Congress these days: impossibly dry, boring beyond belief and purposely inscrutable to all but the select few who will benefit from it. Good thing we have people like Patently Apple and Wall Street to tell us what it all means – maybe.
Apple is granted a pile of patents; weaknesses in GoPro’s camera are mentioned in the filings; and GoPro’s stock drops as low as 18% in a day – before recovering.
But here’s the dirty little secret: Wall Street wins whether a stock goes up OR down. What it needs is volatility (because it makes money in either direction), and that means it constantly needs big stories told to people with short memories.
Am I being unfair?
Maybe. Maybe not.
Turns out huge chunks of trading volume aren’t done by people anyway, but by machines. Yep. Software. So if a story causes people to start selling, it takes the machines to start selling bigger and much, much faster (if you haven’t already done so, you might want to check out Michael Lewis’ Flash Boys: A Wall Street Revolt.
Since GoPro (GPRO) went public back in June of 2014 with an initial offering price of $24 per share, its stock has traded as high as $98.47. While it opened on Tuesday (the day of Apple’s patent news) at $57.06 a share and dropped to $48.23 by 2:20 that afternoon, it recovered to almost $50 by the close.
So yeah: GoPro took a bath – although it could just as easily be taking its continuing bath because it has OTHER patent woes (Contour), or because the machines concluded its P/E multiple or earnings momentum or who-knows-what-else weren’t yummy enough – or too yummy to resist (the machines can short-sell, too).
All of which truly have nothing to do with whether or not using a GoPro helps you tell your story today, but might mean some awesome bonuses for the M&A boys six months from now.
Apple wins camera patent that sends GoPro stock tumbling
Shares of GoPro stock plummeted as much as 15% this afternoon after it was announced that Apple was awarded a patent that could put the wearable camera company in serious trouble.
Apple was granted a series of 34 patents by the U.S. Patent and Trademark Office today relating to a camera system that can be mounted to helmets and scuba masks and controlled remotely. That patent specifically mentions weaknesses in GoPro’s system, which has sent investors worrying that Apple is aiming to crush the sports camera giant.
Read full article “Apple wins camera patent that sends GoPro stock tumbling”
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(cover photo credit: snap from getprismatic.com)