GoPro Inc (GPRO) Valuation: The Options Tell the Story

By Bradford and Andrew Cornell

GoPro Inc (GPRO) Valuation: The Options Tell the Story by Bradford Cornell and Andrew Cornell

The stock performance of GoPro Inc (NASDAQ:GPRO) has been stunning. Rising from an IPO price of $24 earlier in the year to over $80. All this based on the production of action cameras, a market in which there are few barriers to entry. It seems like a screaming short, but not so fast. There is a problem and it can be seen by looking at the option market.

As part of his research on options, Nobel Prize winner Robert Merton derived what has come to be called the put-call parity relation. Merton showed that in properly functioning markets the current option price S, the put...