Expected
yield per annum
21-25%
  • Minimal Investment amount 1700 USD
  • Expiration date: 20.02.2019
  • Capital Protection: 75%

GoPro is an American company-manufacturer of action cameras and accessories for them, intended for use in active sports. The market capitalization is $821.5 million, and the number of employees is 1.3 thousand people. *

Underlying Assets GoPro
Currency USD
Expected yield, % per annum 21-25%
Volume of investments 1700 USD
Term of placement of the deposit up to 20.02.2019
Protection of capital 75%
Participation Rate 0.5
Direction of Underlying Asset Price Movement on a price decrease

Falling factors:

  • Reduction of the capitalization level by 18 times in 3 years, since the company's entry into the IPO.
  • The fall of demand. The sharp rise in the popularity of goods was due to the maximum popularity of active sports during the period when the company entered the IPO and the uniqueness of the products, but in recent years the GoPro products have been replaced by more technologically advanced competitors. The main competitors are the manufacturers of quadcopters, which allow shooting from even more inaccessible angles.
  • Technological stagnation. Technically, each new camera, produced in mass production, is technologically stronger than the previous one, but the problem is that nothing revolutionary can offer the company, and the product line does not shine with variety.
  • Orientation. This factor repeats the previous one. GoPro has chosen an extremely narrow market segment, inside which it had no competitors, but with the current speed of technology development and the variability of trends, the company's marketing policy is not flexible enough and does not keep up with market conditions, which does not inspire optimism about its near future.

 

Analysis:

Throughout the time that the company is public, GoPro demonstrates a clear pattern, according to which the cycles of translational drop are about 6 times longer than the previous growth cycles.  It means that the current downward trend will continue for at least 7 months and may amount to 21% of the current value of the company's shares.

This product allows you to participate in the decrease of the underlying asset price wherein the investor risks with a limited amount, which is determined by the Capital protection level.

The product is dedicated specifically for conservative investors, where they can  define and limit the risks of such products themselves. As such, these products provide a great opportunity to receive relativelly high income whilst minimising the possibility of capital loss.

*according to the information from the company's website.

  • Product with capital protection
  • Minimal Investment amount 1700 USD

How the product works

Once the contract is concluded, the initial price of the underlying asset, the Capital protection level, and the participation rate are recorded.

Investor risks are limited to the amount determinated by the Capital protection level.
A product with 100% protection level carries the lowest possible risk and the lowest potential yield.

The repayment to the client is calculated according to the following formula:
Repayment = Investment amount * Capital protection level + Participation rate * Price change- Commission.
Where the investment amount is taken as 100%, and the price change is calculated as follows (Current Price – Initial Price) / Initial Price * 100%.

The commission for a investment product creation is 2% of the initial investment and is charged at the time of product expiration.

If at the Expiration date the price of the underlying asset is higher than the initial price, the investor is paid 100% of the invested funds and an income equal to the product of the participation rate and the growth of the underlying asset. Conversely, the investor is paid the invested funds in accordance with the Capital protection level.

The parameters of the products are indicative and may vary depending on the market situation.

 

Examples:

1. The price of the underlying security moves in the direction chosen by the investor.

In this case, the investor receives the invested amount calculated by the formula: 100% (initial investment) * 75% (Capital protection level) + 0.5 (participation rate) * 60% (price change) = 105%

2. The underlying security’s price moves in the opposite direction and finished below the Capital protection level.

In this case, the investor receives the invested amount calculated by the formula: 100% (initial investment) * 75% (Capital protection level) = 75%

Attention!

The product yields shown in the examples and past financial performance do not guarantee future profits. All investment products are denominated in USD. The commission for an investment product creation is 2% of the initial investment and is charged at the time of product expiration. The expected yield of investment products is given in annualized percentage form.

Note:

The protective investment component is allocated to fixed income products (Eurobonds and deposit schemes at leading banks). NordFX cannot be held responsible for any potential risks associated with the default of Eurobond issuers or the bankruptcy or default of any of the banks in which the deposits are held.

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