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Fitbit: How It’s Fared Since Its 2015 IPO (FIT)

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The Rise and Fall of Fitbit’s Inventory Worth

Fitbit Inc. (FIT), a pioneering developer of wearable fitness-tracking units, noticed its share worth leap practically 50% on the day of its celebrated itemizing in June 2015. The share worth practically doubled from there within the following weeks, reaching $51.90. That marked the height of a dizzying ascent and decline, which noticed the value steadily sink within the following years, to under $Three simply 4 years later—a drop of greater than 90%.

The share worth jumped in late 2019, when Google introduced it could purchase the corporate in a $2.1 billion deal.

Key Takeaways

  • Fitbit’s inventory worth jumped practically 50% on the day it was listed, and practically doubled from there within the following weeks, reaching $51.90.
  • However Fitbit’s share worth would rapidly reverse and start an extended, relentless slide that took it below $Three simply 4 years later, as the corporate confronted rising competitors and its personal inside struggles.
  • Google struck a deal to purchase Fitbit for $7.35 a share in November 2019.

Working Historical past

Fitbit started operations in 2007. As a first-mover within the wearables market, the Fitbit model rapidly grew to become synonymous with health monitoring. By 2012, Fitbit system gross sales had damaged by means of the 1 million mark as momentum continued constructing throughout the market. In 2014, the yr earlier than its IPO, Fitbit captured 41% of the worldwide wearables market, with gross sales of greater than $745 million and internet revenue of practically $132 million.

Lead-As much as the IPO

Fitbit offered 3.9 million units throughout the first quarter of 2015, a rise of 129.4% over the identical interval in 2014. Nonetheless, regardless of the livid progress in gross sales, Fitbit’s market share fell by practically one-fourth, from 44.7% within the first quarter of 2014 to 34.2% in 2015.

The IPO and After

Fitbit’s IPO in June was met with pleasure proper out of the gate, given the corporate’s aggressive place and quick gross sales progress in a booming market. After rising practically 50% throughout the opening day of trading, the inventory continued trending up till second-quarter 2015 earnings had been reported in August. Regardless of handily beating estimates, Fitbit’s share worth quickly sank under $40. Considerations appeared to be linked to a decline in gross margins as the corporate struggled to pump out 4.Four million units to a hungry market.

In November of that yr, the corporate introduced one other spherical of robust earnings outcomes, together with a doubling of the variety of system gross sales from a yr earlier. Nevertheless it additionally introduced plans for a secondary providing of seven million shares, simply months after its IPO, in addition to further gross sales by current shareholders, sending its share worth tumbling by greater than 8%. Though the secondary providing was finally amended to three million shares, traders had been fearful about Fitbit’s fast return to the markets for added working capital.

Rising Competitors

Whereas Fitbit was a pioneer in wearables, it has confronted a rising variety of rivals from all instructions lately, together with low- and mid-priced health wearables from corporations comparable to Jawbone and Xiaomi, in addition to choices within the middle- and high-end health segments from sports activities and expertise giants comparable to Nike, Garmin, Microsoft, and Samsung.

In January 2016, Fitbit unveiled a brand new smartwatch product, referred to as the Fitbit Blaze, to compete towards the Apple Watch and different related choices. The Blaze was met with some skepticism from traders, and Fitbit’s share worth fell practically 20% on the day. The hits stored coming. The identical month, information emerged of a class-action lawsuit towards Fitbit claiming the corporate’s units are inaccurate, significantly its coronary heart charge monitor. within the monitoring of coronary heart charge.

Google Comes Calling

Rumors of a deal between Google and Fitbit—after which information of the deal—despatched Fitbit shares surging above $7 in late October and early November, however the worth has come off of these highs as doubts have arisen in regards to the destiny of the deal. Fitbit would give Google an avenue to compete with Apple’s smartwatch, in addition to entry to beneficial information collected by means of the units. However that information assortment, although, is the main focus of regulators in Europe and elsewhere, as are questions of truthful competitors, elevating some doubts about whether or not the deal will undergo.

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