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GoPro May Pursue Legal Action Against Journalist For False Schumacher Crash Accusations

This article is more than 9 years old.

Since its June debut on the Nasdaq, GoPro had been on a tear. At its high of $93.85 earlier this month, the company's stock was trading at nearly four times its initial public offering price of $24, valuing the San Mateo, Calif.-based camera maker at $11.8 billion.

In a week, a large chunk of that--$2.4 billion in market capitalization to be exact--has been erased as unstable market conditions have hurt stocks across the board, particularly affecting highfliers like GoPro. That hasn't been the only thing weighing on the stock, however, as recent reports have tied GoPro's precipitous plunge of more than 20% in the last five days to a rumor that the company's miniature cameras caused a severe head injury to former Formula 1 driver Michael Schumacher.

On Tuesday, a source at GoPro said that the company was now considering legal action against the rumor's originator, veteran Formula 1 commentator and journalist Jean-Louis Moncet, noting that his comments were negligent and damaging to shareholders. Moncet, who has since deemed the rumor as opinion and not fact on his  Twitter  account, did not respond to requests for comment.

Moncet's comments last Friday on French radio channel Europe 1 sparked a wave of controversy as he suggested that Schumacher's head injury during a skiing accident in December was exacerbated by the GoPro that was mounted on his head. At the time of the accident, Schumacher was skiing at the French Alps resort of Méribel when he deliberately traveled off the marked course and ended up crashing into rocks.

Unsubstantiated early reports, which were echoed by Moncet, theorized that the former race car driver's GoPro might have weakened the structure of the helmet. Schumacher, arguably Formula 1's most popular athlete of all time, spent six months in a medically-induced coma following the crash, and is now awake and recovering from injuries

"I saw [Schumacher's] son recently," Moncet said last week in French. "[Schumacher] is slowly waking up. The problem for Michael was not the hit, but the mounting of the GoPro on his helmet that injured his brain."

Those comments, according to reports, caused GoPro's shares to sink since Monday. While the company's stock had already been down more than 9% since it closed at its highest ever point on Oct. 7, the stock slid another 11.8% following Moncet's comments, which some analysts said is somewhat correlated.

"As often the case with very rapidly moving tech stocks, if momentum is broken and you stir in heightened macro concerns you can get this sort of correction," said Alex Gauna, an analyst at JMP Securities. "Sometimes investors shoot first and ask later."

Raymond James & Associates analyst Tavis McCourt said it was "hard to tell" if Moncet's comments were the main perpetrator of GoPro's slide in a market that has seen the gains from recent IPO companies pulled back. On Wednesday the S&P 500 fell nearly 3%, before rallying to close down 0.8% to 1,862. The index is down 7.8% since it reached a record high on Sept. 19.

It's much like what happened with Mobileye, another recent IPO stock that is down more than 20% in the last five days, said McCourt. "In a difficult market stocks that are big winners tend to take the biggest hits."

On Wednesday, Moncet took to Twitter to explain what he said on air. "Talking about GoPro, there were [sic.] no news," he wrote. "It was just my opinion. #F1." Moncet also denied talking to Schumacher's 15-year-old son Mick about the accident.

Despite this, GoPro's competitors have also latched on to the rumors as a sign of the company's potential weaknesses. "GoPro still has a long way to go," said iON CEO Giovanni Tomaselli, whose company makes a competing action camera. "To have a situation where the company's stock collapses in a week when somebody says that maybe the camera can send someone into a coma, that's a sign."

GoPro spokesperson Jeff Brown declined to comment.

A source within GoPro said that the company is considering different types of action against Moncet in France, which does not have the same laws protecting the press as in the United States. That source also said the company is studying how American electric car manufacturer Tesla Motors responded to an unsavory report in the New York Times last year that its car batteries did not last as long as advertised. In that situation, Tesla CEO Elon Musk reacted openly to the accusations against the company, penning an essay to debunk the Times' claims.

While it's unclear whether GoPro's played any role in Schumacher's accident, its misleading to claim that the cameras were definitively involved in the injury, said Gauna. He also pointed out that the company's IPO documents detailed the fact that athletes using its cameras were often involved in dangerous sports and that GoPro maintains insurance to protect itself against potential customer complaints.

"There is nothing tangible to point to at this juncture to GoPro being at fault at this," said Gauna.  It's a freak accident with a Formula 1 racer who went [off course] and hit two rocks. To point the finger at GoPro for the injury right now is irresponsible."

With reporting from Aaron Tilley and Ellen Huet in San Francisco.

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