GoPro CEO Nicholas Woodman puts $20 million into company amid sale review

GoPro's founder and CEO Nicholas Woodman is providing $20 million in financing, structured to keep the company running while its board reviews a possible sale.

GoPro has announced that its founder and CEO, Nicholas Woodman, is putting $20 million of his own money into the company. The financing reads less like an investment in growth and more like a bridging loan, something to keep the company running while its board works through a possible sale.

There’s some interesting detail in the deal. Woodman isn't just handing over the cash, GoPro is giving him an IOU plus the right to buy shares later on. The IOU pays 6.5% interest each year, but GoPro isn't paying that interest in cash as it goes along. Instead, the interest gets tacked onto the total amount owed, so the debt grows until it's due in July 2028. If GoPro runs into serious trouble before then, Woodman has a claim on company assets to recover his money (though other lenders with older debt get paid first).

The paperwork also spells out situations where GoPro would have to pay Woodman back early: if the company clears its existing loans, sells off certain assets, defaults on other debt, or gets bought out or files for bankruptcy. That default clause in particular signals that the deal was drawn up with the risk of missed payments elsewhere already in mind. There's also a standard clause saying that if GoPro is sold, whoever buys it takes on this arrangement.

This seems to be evidence that the deal was built around a near-term sale scenario rather than a longer-term independent future.

The share-buying right covers about 25.7 million shares at a price of $0.778 each. GoPro's stock was trading at $0.731 at time of writing, so Woodman isn't getting a bargain here; he'd be paying slightly more than the current share price if he exercises the option.

It's all in the timing

What stands out is the timing: he can't use this option for at least six months, unless GoPro announces a takeover sooner. That clause only makes sense if a sale is genuinely expected within that window.

An independent group of GoPro's board members reviewed other ways to raise the money and picked this deal as the best available option, the company said, without disclosing what the alternatives were.

Add all this up and this is a company that looks to be funding itself through its own CEO to stay operational in the short term with an eye on a sale before the end of the year.