GoPro's stock soared following news of a deal that will bring it into the AI market

Shares of GoPro, a small-cap action-camera manufacturer, soared 40% on September 1. The company announced that it had agreed to a merger with Starman Optical, a privately held developer of optical transceivers. The deal will allow it to expand its presence in the artificial intelligence-powered data center market and the defense industry.

GoPro shares rose more than 40% on the Nasdaq on September 1, reaching $1.23. This came after the company announced that it had entered into a definitive merger agreement with Starman Optical.

Under the terms of the deal, GoPro’s current shareholders will receive $1.14 per share (for a total of $285 million). This is nearly 30% higher than their value on August 31, the day before the deal was announced, but 7.3% lower than the most recent closing price. They will also retain approximately 10% of the combined company, according to the press release. Based on this, Red Shark News described the deal as more like a takeover.

The parties plan to close the deal by the end of 2026. It has already been approved by the boards of directors of both companies; now the merger must be approved by GoPro’s shareholders and regulators, according to the statement.

After the offering is completed, GoPro shares will continue to be traded on the stock exchange.

In just two trading days, the action camera manufacturer more than doubled its market capitalization. On Monday, August 31, its stock soared 46% after Bloomberg reported that Mark Fischbach, known on YouTube as Markiplier, had acquired an 8.5% stake in GoPro, becoming its largest shareholder.

In premarket trading on September 2, the action camera manufacturer's stock price fell 3%.

The action camera manufacturer expects the deal to allow GoPro to expand its presence in the data center market and the defense industry.

Starman is part of Starman Holding, owned by billionaire Charles Thebele, and specializes in optical-photonics technologies, including the development and manufacture of optical transceivers. These devices convert electrical signals into optical signals and vice versa for data transmission over fiber-optic cables and are used, among other things, in data centers, routers, and switches. In 2024, Starman Holding established a joint venture with the Israeli company New Photonics to set up specialized facilities in the United States. Currently, this joint venture, named Starman New Photonics, is building a transceiver manufacturing plant in New Jersey.

Following its merger with Starman, GoPro aims to become a leading U.S. provider of imaging and optics solutions for the national security sector, said GoPro CEO Nicholas Woodman (as quoted in a press release).

Since April, GoPro has been exploring opportunities to apply its technology in the defense and aerospace sectors; at that time, it hired the consulting firm Oliver Wyman for this purpose.

By May 11, the company had already received several offers, followed by an announcement that it had begun exploring strategic alternatives, which could include a sale or a merger with another company.

In June, GoPro reported significant doubts about its ability to continue operations due to a sharp spike in memory card prices and a reduction in their production.

All of this is happening against a backdrop of poor financial results. For example, in the first quarter of 2026, GoPro’s revenue fell 26% year-over-year to $99 million, and in the second quarter, it dropped 31% year-over-year to $105 million. Meanwhile, the net loss in January–March jumped 72% year-over-year to $81 million, and in April–June, it rose by nearly 219% compared to the same quarter last year, reaching $51 million.

"These figures make it impossible to meet the terms of our loan agreements," the company wrote. According to the press release, GoPro's debt of approximately $92 million is expected to be fully repaid by the time the deal with Starman closes.

Only one Wall Street analyst has issued a rating on GoPro shares. He recommends selling them, and his price target for the stock is $0.50—59% below the latest closing price.