GoPro Raises Going Concern Warning, Shares Slide 8% on Liquidity Risks
GPRO•Shares of GoPro fell 8% in premarket trading after the company disclosed substantial doubt about its ability to continue operating as a going concern in amended annual and quarterly filings. Auditor-added language highlights liquidity risks under $50 million credit lines and $50 million convertible debentures and warns of potential cross-defaults.
1. Substantial Doubt Raised
GoPro disclosed substantial doubt regarding its ability to continue as a going concern, prompting an 8% decline in premarket share trading. The company’s independent auditor added an explanatory paragraph highlighting uncertainties in meeting obligations over the next 12 months.
2. Amended Annual and Quarterly Reports
The company refiled its 2025 annual report and updated its quarterly report for the period ended March 31, 2026, to include the going concern qualification. These amended filings are expected to be submitted on June 1.
3. Credit Facilities and Convertible Debentures
GoPro maintains $50 million in credit arrangements with Farallon Capital Management and Wells Fargo Bank, plus up to $50 million in convertible debentures under a February 2026 agreement with YA II PN. These financing sources serve as its primary liquidity backstops.
4. Cross-Default Risk and Lender Discussions
Management cautioned that the going concern warning could trigger cross-default provisions across its debt facilities, potentially escalating lender remedies. GoPro is actively in discussions with creditors to address covenant issues and preserve access to financing.
