Small caps last week: GoPro's big week, G-III acquires Marc Jacobs, Dropbox hack

Last week, action-camera maker GoPro more than doubled thanks to an investment by a YouTube star, along with a merger that will help the company to enter the AI market. Meanwhile, revenue from G-III Apparel Group, owner of Marc Jacobs and DKNY, disappointed investors, and hackers breached thousands of Dropbox accounts. These stories headline the Oninvest recap of happenings in the small-cap space for the week of August 31-September 4.

Action-camera maker GoPro surprised investors twice this week. On Monday, it emerged that popular YouTuber Mark Fischbach, known online as Markiplier, had become the company’s largest shareholder. Fischbach, a longtime GoPro user, considered the stock undervalued, Bloomberg wrote. He said the investment reflected not only his belief in the business but also his desire to make filmmaking more accessible. GoPro shares ended Monday up 46% at $0.88 apiece. It was the sharpest single-day gain in the company’s history, Stocktwits noted.

The next day, GoPro announced a merger with privately held optical-transceiver developer Starman Optical to expand into AI data centers and the defense market. The companies plan to close the deal by the end of the year. Their boards have already approved it, while the merger remains subject to approval by GoPro shareholders and regulators. Once the deal closes, GoPro will remain publicly listed. The stock gained 40% on Tuesday.

G-III Apparel Group, owner of brands like Marc Jacobs, DKNY, and Donna Karan, disappointed investors on revenue for its fiscal-2027 second quarter. The top line fell 10% year over year to $554.1 million, versus the $570 million forecast. The company attributed the miss to weaker sales in Europe. Meanwhile, earnings came in at $0.26 per share, above the consensus estimate of $0.23 per share.

For the full year, G-III expects revenue to decline more than 8% to $2.71 billion, partly due to the loss of around $460 million in sales following the expiration of its Calvin Klein and Tommy Hilfiger licenses. The guidance does not yet include Marc Jacobs, which G-III acquired on Tuesday. The management expects the brand to generate more than $1 billion in annual revenue in the long term. G-III shares fell 11.5% on the Nasdaq on Wednesday to $28.47 apiece. Two Wall Street analysts rate the stock a “buy,” versus one “hold” rating. The average target price is $37.33 per share, 37% above the last close.

Dropbox, which operates the namesake cloud-storage platform, told Bloomberg that around 5,000 accounts were compromised in August. Company spokesperson Tim Rathschmidt said the breaches would not have a material impact on Dropbox’s business, however. The compromised accounts were linked to Lenovo ID and were not protected by two-factor authentication, Bloomberg noted. Dropbox shares lost less than 1% on Tuesday.

Dropbox has gained more than 25% since the beginning of the year. However, only one analyst recommends "buy," while five have “hold” ratings and another five rate Dropbox a "sell." One reason for Wall Street’s caution is stagnant revenue growth, according to Seeking Alpha analyst Andres Veurink. In the second quarter, Dropbox’s consolidated revenue rose just 0.9% year over year to $631.5 million. Another reason is fierce competition: Dropbox charges for access to tools that Google and Microsoft users get for free. Dropbox’s AI assistant Dash, launched in 2024, has yet to turn a profit.