It's been rough sledding in the new year for GoPro Inc (NASDAQ:GPRO), and today is no different. This morning, Morgan Stanley downgraded the camera maker to "underweight" from "equal weight," while issuing a price-target cut to $5 from $9.50. Analysts at the firm noted that the company's camera usability is not improving fast enough, and that software development is critical for a rebound in 2018.
The downgrade has GPRO stock trading 3.4% lower today at $6.09. The shares have shed 35% year-over-year, andfell to a record low of $5.04 on Jan. 8, after the company cut its outlook and said it was exiting the drone business. In fact, the security has been trading below the 50-day moving average since its early November bear gap.
Short sellers continue to target GPRO in the meantime. Short interest increased by 8% during the last reporting period to 31.24 million shares, the highest point since November. This represents a whopping 31% of GPRO's total available float, and based on average daily volumes it'd take these bears 10 weeks to buy back their bets.
Nevertheless, options traders continue to prefer calls over puts. For example, the equity has a 10-day call/put volume ratio of 3.76 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Of course, some of the interest in long calls could be from short sellers seeking an upside hedge on GoPro.