GoPro Inc. (NASDAQ: GPRO) is finding itself in the same position as many former hot IPOs have found themselves. They go from hot stocks to hot potatoes. What feels as though it is happening is that the management team at GoPro is operating the company with a failure to communicate properly to investors. After having one of the top initial public offerings of 2014, GoPro stock rose to over $90 in October. Since then, shares have plummeted. Thursday’s earnings report, and the news after the report, have sent things from bad to worse.

The main question is, what should investors really be expecting from GoPro? It seems that GoPro is finding itself in the position where it just may not be communicating properly with its investors. Unfortunately, after being public only a half-year or so, the company does not have years and years of a track record to the point that investors will ignore what could just be blips and hiccups at the start of an incredible growth story.

The extreme-action camera maker just recently released earnings that were incredibly positive and in the company’s favor. Unfortunately, it issued an SEC filing after the earnings report that said, “On February 2, 2015, Nina Richardson tendered her resignation as the Registrant’s Chief Operating Officer effective as of February 27, 2015.” Some investors may feel that this means the company is losing its equivalent of adult supervision, and GoPro made no mention of Richardson at all in the actual earnings release.

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Then, after the stock reopened after its halt and was up around 4%, the guidance took the rest of the wind out of GoPro’s sails. By releasing guidance in the conference call after earnings, this left those who only looked at the earnings report thinking that all was well. A reaction that is down 10% the following morning is indicative of something not very positive. Again, this was one of the hottest IPOs of 2014.

Investors are likely to feel that there remains a problem with the company if it cannot report the good with the bad.

Oppenheimer has been the most negative of all firms against GoPro, with an Underperform rating and a $45 price target. It was negative from the start, and the team there has been proven right in the price direction of the stock. The firm reiterated its Underperform rating, but it cut the price target to $35 in the call. This is now a case of the analyst with the lowest price target going to an even lower one. The rating would be interpreted as “GoPro is a Strong Short-Sell rating,” if you know how to interpret analyst ratings. The report said:

GoPro beat fourth quarter guidance and consensus handsomely and guided a mixed first quarter. While we are impressed by its execution and successful Hero 4 launch, our long-term bearish view has not changed and we see new near-term headwinds. Besides the long-term challenges (competition, market shrink, ecosystem weakness) we have reiterated before, we expect GoPro’s fast growing opex, gross margin pressure from higher overseas sales, and lack of media revenues to reduce the upside in earnings grow thin in 2015 and 2016. Based on fourth quarter results and management comments, our 2015 earnings per share is unchanged and we lower our 2016 earnings per share from $1.28 to $1.18.

Also:

First quarter Guidance: GoPro guided revenues at $330-340 million, gross margin of 44.5%, Opex of$115 million, earnings per share of $0.15-0.17. We believe guidance reflects strong sales momentum post-holiday season (up 43% year over year at mid-point) into the international markets. We lower our first quarter earnings per share estimate from $0.20 to $0.16 due to higher opex. Model Changes: We adjust 2015 earnings and 2016 earnings revenues/non-GAAP earnings per share from $1.51/$1.07 billion and $1.74/$1.28 billion to $1.58/$1.07 billion and $1.77/$1.18 billion. The changes are driven by lower average selling prices and gross margin, higher opex, and reduced media revenues offset by higher-than-before shipment projections. We raise 2015 and 2016 shipment by 1 million and 0.8 million units.

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Oppenheimer had several points for being so negative. First, that GoPro would have increased competition from companies with better technology expertise (what we are currently seeing from Apple with its remote control camera patent). The next reason is that there is a limited market expansion opportunity coupled with a weakness in GoPro’s ecosystem.

This week’s earnings report was not the first communications snafu. In late 2014 there was a fear that insiders were selling shares earlier than the lock-up period expiration. It turns out that some shares were for a charitable foundation and that the charity was going to hold shares. The follow-on offering in November turned out to be at a very large discount to the market price of GoPro’s stock. We viewed this as a mistake by management, or even as an effort to lock in some of those gains.

It is undeniable that GoPro has a great set of products. It is probably also a sure bet that its media channel will be a success. It is also hard to deny that competing products are already about and more competition ahead is likely. Founder and CEO Nicholas Woodman is finding himself in the precarious scenario in which investors want to believe in the great growth story but they could also start to worry that communication is not clear and timely enough. That can spell serious trouble for a company.

GoPro shares were down over 10% and under $49 shortly after the opening bell on Friday. The stock had a consensus analyst price target of $76.55 before the report, and its 52-week trading range is $28.65 to $98.47. Yes, shares have effectively been cut in half from the peak.

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