GoPro’s $285 Million Rescue: AI and Defense Pivot Leaves Shareholders With a 10% Lottery Ticket

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To call GoPro (GPRO) a struggling company would be a vast understatement. In the midst of 88 straight days of trading below a dollar per share starting in early June, the action-camera company received a delisting notice from Nasdaq on July 21. GoPro shares hit rock bottom at 57 cents during intraday trading on August 12.

But on September 1, privately held optical-transceivers maker Starman Optical and GoPro released a joint statement announcing that Starman will buy GoPro for $285 million in cash. The deal valued GoPro’s shares at $1.14, a roughly 29.6% premium to the stock’s previous closing price.

Through this deal, Starman would receive a 90% stake in GoPro. Current GoPro shareholders would own the remaining 10% of the company. The agreement amounts to a major lifeline for GoPro, which had roughly $27.3 million in cash but $405 million in current liabilities at the time of the deal.

On August 31, GoPro closed at roughly 88 cents, which actually represented a huge gain from the 60-cent closing price on August 28 (driven by separate news that popular YouTube creator Mark “Markiplier” Fischbach had purchased an 8.5% stake in GoPro in July, driving its trading volume of less than 9 million shares on August 28 to more than 220 million shares on August 31).

On September 1, after the Starman deal was announced, GoPro surged as high as $1.64 – an 87.2% increase – with more than 500 million shares traded for the full day. By market close on September 2, GoPro was up to $1.69, gaining 92.9% in a span of two days.

Whether those levels hold depends largely on how GoPro’s shareholders vote on the deal later in the year.

How GoPro Got Here: A Look at the Struggling Camera Company’s Numbers

Once upon a time (in 2014), GoPro was on top of the world. The company hit a $4 billion valuation on its first trading day that year, and its revenue soared to nearly $634 million during the last quarter of 2014 alone.

How the mighty have fallen…

Here’s a look at GoPro’s 2025 and 2026 (through the second quarter) numbers:

• Full-year 2025 revenue was $652 million, a 19% year-over-year decline, and just $18 million more than the company’s fourth-quarter 2014 revenue.

• The company sold about 2 million cameras in 2025, down 20% year over year.

• Hardware revenue in 2025 fell 21.5% year over year.

• Second-quarter 2026 revenue was $105 million, down 31% year over year – and, alarmingly, down roughly 80% from that 2014 fourth-quarter peak.

• Approximately 291,000 cameras were sold in the second quarter, a 38% year-over-year drop.

• There was a dip in the GAAP (generally accepted accounting principles) gross margin from 35.8% to 30.2%.

• GAAP net loss was $51 million, or $0.30 per share, compared with a $16 million net loss the year before. Non-GAAP net loss was $36 million, or $0.21 per share, versus a $12 million net loss the previous year.

• Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) took a nosedive from negative $6 million to negative $29 million year over year.

Not pretty. All of this underperformance pushed GoPro to reduce its workforce by 23% in April.

The lone positive? A second-quarter 11% year-over-year increase in subscription and service revenue, to $29 million, and a record 69% subscriber attach rate (the percentage of customers who purchase an add-on service or choose a recurring subscription option).

What’s behind GoPro’s dramatic fall from grace? First, the space has become flooded with competition – namely, cheaper products manufactured by Chinese companies like Insta360 and DJI, which can run as much as $100 to $200 less than comparable GoPro models.

Then there are rising memory-chip costs that are dogging most of the electronics industry. Over the past year, memory-chip prices have skyrocketed by up to an almost unfathomable 500%. Electronics makers are beginning to pass those costs down to consumers.

With those concerns in mind, as well as GoPro’s $92 million in debt, it’s safe to say that Starman Optical came along at the right time.

Starman Optical: Is the Optics Business a Good Fit for GoPro?

If you hadn’t heard of Starman Optical before this deal, welcome to the club. The privately held company is part of the larger Starman family, which includes consumer brands such as Griffin, Incase, and Incipio, as well as medical, distribution, and real estate businesses.

Starman New Photonics is the arm under which Starman Optical operates. And Starman Optical was literally incorporated in Delaware on August 31, the day before the GoPro acquisition was announced. So, it’s very new. And it’s a very different direction for GoPro.

The GoPro you’re familiar with is a leading maker of action cameras and accessories. This new version of GoPro will still maintain its retail camera business. But it will soon add defense, government, robotics, aerospace, fiber-optics, and artificial intelligence (“AI”)-infrastructure markets to its portfolio under Starman.

When announcing the deal, the companies noted that this combination would better leverage GoPro’s impressive number of U.S. patents (more than 2,500) by incorporating its innovations into optics and imaging components that can be used in the defense and AI markets.

And it might be the best thing that has happened to GoPro since 2014.

Why the Pivot to Defense and AI Makes Sense for GoPro

The match between GoPro and Starman Optical makes perfect sense: Many of GoPro’s patents involve optics and imaging technology, and Starman Optical is an expert in making the optical transceivers used in AI data centers.

(These transceivers convert electronic data signals into high-speed light pulses to connect AI processors, servers, and network switches. This helps keep the data flowing while AI clusters train large models.)

Combining these elements could pay off for both companies, considering the AI optical-transceiver market is taking off. TrendForce research predicts the market will hit $26 billion in 2026, up nearly $10 billion from last year.

The fact that Starman’s transceivers are built in the U.S. is another advantage, with the Federal Communications Commission proposing a ban on Chinese-made transceivers to protect AI data-center security.

Financially, this deal is a lifeline for GoPro, as the acquisition will pay off GoPro’s $92 million debt. That should allow the company to focus on new products both for consumers and for Starman Optical.

With AI-infrastructure spending reaching mind-blowing proportions and an aerospace and defense industry worth roughly $900 billion, the GoPro/Starman coupling could be a match made in heaven if Starman can successfully integrate GoPro’s patented technologies into products for these markets.

That’s something GoPro could never have accomplished on its own as a consumer-focused action-camera manufacturer.

The GoPro Shareholder Dilemma: Take the Money or Keep the 10% Lottery Ticket?

Here’s where things get tricky for GoPro shareholders. They have two choices, assuming the deal passes: Take the $1.14 per share, cash out, and move on. Or keep the “lottery ticket” stub – each shareholder’s portion of the collective 10% stake in the new GoPro-Starman venture – and hope for the best.

The problem is that no one really knows what that lottery ticket will be worth.

After all, we’re talking about:

• A company (Starman Optical) whose incorporation is literally days old.

• An entity (Starman New Photonics) that owns Starman Optical and GoPro that is still growing and not yet turning a profit.

• A newly formed operation (Starman Optical and GoPro) that has not yet designed any new products, let alone built and sold them.

In other words, shareholders face substantial unknowns. A lot must go right for GoPro stock to gain value above its $1.14-per-share sale price. The first step involves Starman New Photonics successfully opening its new 100,000-square-foot manufacturing facility in Warren, New Jersey.

From there, Starman must increase production of its core Liberty Series 800G and 1.6T transceivers, which are just starting low-volume shipments and undergoing further testing, respectively. The 800G transceivers likely won’t ramp up production until late this year.

While the GoPro-Starman partnership certainly appears promising, there’s no guarantee it will succeed. It will take some time for the two companies to put their collective heads together and design, test, build, and sell new products that potential aerospace, defense, and AI customers will want.

If new government, military, and/or hyperscaler contracts are secured reasonably soon, hanging on to the collective 10% stub may prove worthwhile. Unfortunately for shareholders, there’s simply no way of knowing what the future holds for GoPro.

What to Watch in the Coming Months

As I noted, Starman is expected to expand production of its 800G transceivers later this year, depending on when the New Jersey factory opens. A smooth rollout is worth monitoring there, as are the next stages of 1.6T transceiver testing and initial factory production.

Even more important, however, is the shareholder vote, which will likely occur in November or December, before the deal closes (presumably by the end of the year). Once the mechanics of the deal (cash, plus the 10% stub) are confirmed against the proxy, which should occur in October or November, GoPro shareholders will decide whether to sell the company to Starman.

This is a key development for potential GoPro investors to watch.

If the vote passes, which is expected, the safe bet is that the stock probably won’t drop below the $1.14 share sale price. Even if it does, investors who buy GoPro shares before the deal closes are guaranteed $1.14 per share, so they’ll get their money back anyway.

But if the vote fails, that $1.14 floor disappears, and the stock will probably crash back down to its pre-merger levels. We will find out in a few months.

Is GoPro Worth the Risk?

That depends on your level of risk tolerance. If GoPro and Starman can create some high-quality products that appeal to the aerospace, defense, and AI industries, this could be a worthwhile investment that pays off a few years from now.

But those are big ifs. And they’re not the only ones. Keep in mind that GoPro was once a highly successful company that found its niche in selling action cameras to outdoor enthusiasts, athletes, and content creators – until it wasn’t.

Between cheaper Chinese competition, rising memory costs, and major improvements in smartphone cameras, GoPro lost its footing… and nearly everything else.

Since 2014 and its initial $4 billion valuation, GoPro has lost 96% of its value. (Yes, 96%.)

With this deal, however, GoPro gets a rare second chance, not only to sell more cameras, but to reinvent itself as a business. Time will tell how two very different companies and product offerings mesh.

But with GoPro’s innovation and 2,500-plus patents, Starman Optical probably feels like a kid in a candy store, with tons of opportunities yet to be discovered. It won’t happen overnight, though. Impatient investors may want to steer clear. But for those willing to give the GoPro-Starman merger some time to bake, the payoff may be worth the wait.

Regards,

David Engle

Editor’s Note: It’s easy to assume the AI story begins and ends with the big-name chip stocks. But there’s a quieter version of it playing out inside the defense budget – where the government isn’t just regulating AI, it’s starting to buy into the companies that build it.

A forensic accountant named Joel Litman – someone the Pentagon and FBI have actually consulted, and who called both the 2008 and 2020 crashes – argues this is one slice of a much bigger shift he calls the “Second Declaration.” He believes a handful of companies sitting where AI meets national defense could be repriced when a policy deadline arrives this November.

Watch his full presentation here → LINK