The stock of GoPro Inc. (NASDAQ: GPRO), the struggling action camera maker, increased by 5.4 percent after GoPro unveiled the partnership with extreme sports sponsor Red Bull in a marketing and promotion deal today, a deal that makes GoPro the official point-of-view camera provider for Red Bull's events and videos.
GoPro, briefly a Wall Street favorite following an initial public offering in 2014, experienced ahuge shares fall of 82 percent in the past year as the company wrestles with weak demand for its helmet- and body-mounted cameras. Demand for GoPro's cameras has been declining as rivals like China's Xiaomi [XTC.UL] offer cheaper products and smartphone cameras turn increasingly advanced.
Red Bull, the world's top seller of caffeinated energy drinks, is a major sponsor of automobile racing, BMX, skateboarding and other sports in which athletes widely use GoPro's devices to record their often extreme accomplishments.
The two companies will produce content shown across both of their distribution networks and the deal gives Red Bull equity in GoPro.
"Historically, a ton of this stuff has probably already been filmed using GoPro cameras. My guess is we'll see more GoPro logos in those videos," said Dougherty & Company LLC analyst Charles Anderson, who has a "neutral" rating on GoPro's stock.
In addition, Nick Woodman, CEO of GoPro, told CNBC that Red Bull's stake in the company was under 1 percent.