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GoPro Shares Rise on Patent Sharing Deal with Microsoft

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Shares of GoPro, Inc.GPRO rose nearly 6% in after-hours trading yesterday, on the news that the action camera maker had inked a patent licensing agreement with Microsoft Corporation MSFT .

The agreement comes just days after GoPro reported dismal fourth-quarter earnings, as the struggling tech company grapples with weakness in its core business of wearable cameras.

The patent-sharing deal will give GoPro access to certain file storage and system technologies patents from Microsoft Technology Licensing.

The specific terms of the deal have been kept under wraps, and neither Microsoft nor GoPro shared any further details.

Microsoft's licensing of personal wearable technologies is enjoying robust demand, as such deals enable optimized solutions across all industries globally.

The announcement comes as GoPro is struggling to persuade investors of its progress on upgrading software editing capabilities for its action cameras. In addition, GoPro is facing concerns that the market for its wearable cameras is becoming saturated, which is supplemented by intense competition from overseas manufacturers and smartphone technology.

GoPro certainly has had a rough couple of months, with dismal fourth-quarter 2015 earnings and a bleak first-quarter 2016 outlook, that was even worse than what analysts had feared. (Read More: GoPro's Q4 Earnings Miss Worse than Feared, Shares Dive )

In addition to this, the company has decided to downsize the workforce, and announced the departure of a key executive.

GoPro shares have plunged almost 45% so far this year because of sub-standard financial results, which are not expected to improve in the near term. The stock has tumbled 78% over the past one year.

In its attempts to turn fortunes around, the company is exploring several new revenue streams, including a quadcopter drone - Karma - that will be released later this year, Virtual Reality and licensing content shot on its cameras to media companies.

GoPro currently holds a Zacks Rank #5 (Strong Sell). A couple of better-ranked stocks that could be worth a look now are II-VI Incorporated IIVI and Avid Technology, Inc. AVID , both sporting a Zacks Rank #1 (Strong Buy).

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MICROSOFT CORP (MSFT): Free Stock Analysis Report

AVID TECH INC (AVID): Free Stock Analysis Report

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GOPRO INC-A (GPRO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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