A proposed class of investors in GoPro, Inc. (“GoPro”) have requested that the United States District Court for the Northern District of California approve a $6.75 million settlement of claims that the action camera company hid mistakes that caused its stock prices to fall.
The suit accuses GoPro of announcing a new camera, HERO5, and camera drone, Karma, on September 19, 2016, claiming the models would be available for purchase by October. However, GoPro allegedly undersupplied the HERO5 and delayed the release date of the Karma, causing stocks to drop. Shares fell even further on November 8, 2016, when GoPro announced it would be recalling the Karma, after having only produced and sold 2,500 of the models.
The class alleges it purchased GoPro stock shares with the expectation that GoPro had made accurate announcements about its products, and shareholders were subsequently harmed when GoPro’s statements proved to be false and stock prices sank.
Lead plaintiff, Troy Larkin (“Larkin”), explained that the settlement allows shareholders to recover about 5.25 percent of the total damages they might expect from an absolute victory at trial. Although the number sounds small, it is almost twice as high as the average recovery of total possible damages for similar securities class actions, 2.6 percent.
Pursuant to the terms of the settlement, GoPro will create a settlement fund to pay out the proposed class, which consists of any investor who purchased stock in GoPro between September and November of 2016. Recovery amounts will be distributed based on how many shares each shareholder purchased during the class period. As part of the settlement, the class has agreed to release GoPro from liability over the allegations.
The legal team at Shepherd, Finkelman, Miller & Shah, LLP (“SFMS”) has significant experience litigating securities and consumer protection matters. Please contact Nick Lussier or Chiharu Sekino if you have a similar matter to discuss. We can also be reached toll-free at (866) 540-5505.
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