Fitbit boosts proposed IPO price range by $3 a share

June 16, 2015

Fitbit Inc. on Tuesday raised the estimated price range for its initial public offering by $3 a share, implying a valuation for the wearable fitness tracking company of nearly $4 billion.

Fitbit is looking to sell 22.4 million shares for $17 to $19 each, up from its previous range of $14 to $16 each.

Fitbit also disclosed in a regulatory filing that shareholders now plan to sell 12 million shares in the offering, up from 7.5 million shares.

At the top end of the new range, the offering could raise more than $750 million. That figure includes the company and shareholder shares and a so-called overallotment option, which gives underwriters the opportunity to sell additional shares under certain circumstances.

Fitbit estimated net proceeds from the offering of $373.9 million at the midpoint of the range. The company has said it could use the money for things like research and development and acquisitions.

The San Francisco company filed to go public in May in a move that will help fend against a mounting assault from a range of corporate giants eager for a piece of the burgeoning market. It is looking to trade on the New York Stock Exchange under ticker symbol FIT.

Fitbit IPO Prices at $20 a Share, Above Expectations

Initial public offering gives wearable device maker valuation of about $4.1 billion

June 17, 2015 7:02 p.m. ET

Fitbit Inc., the maker of wearable fitness-tracking devices, priced its initial public offering at $20 a share, above already raised expectations, according to a person familiar with the offering.

The deal raised about $732 million for the company and some of its shareholders by selling 36.6 million shares, according to the person familiar with the deal, and gives Fitbit a valuation of about $4.1 billion. That total doesn’t count a so-called overallotment option, which gives underwriters the opportunity to sell additional shares under certain circumstances.

It marks the third largest U.S. IPO this year, according to deal tracker Dealogic.

San Francisco-based Fitbit had planned to sell 34.5 million shares in the range of $17 to $19 a share. Originally the price range had been $14 to $16 and the company and some stockholders planned to sell 29.9 million shares, but the price and share count were raised following demand among investors, thanks to the strong brand recognition, robust revenue growth and an annual profit.

The market for wearable fitness devices is growing. According to the International Data Corp., the world-wide basic wearables market, which includes devices made by Fitbit, is set to grow from about 15.4 million units shipped in 2014 to about 52 million in 2019.

While there are other fitness-tracking devices on the market, including those made by competitors Jawbone and Garmin Ltd. , Fitbit arguably is the leader in the eyes of many consumers, analysts said.

Fitbit captures about 68% of market share for U.S. activity trackers, according to NPD Group. But some investors wonder if Fitbit can remain such a dominant player in the industry. In addition to Jawbone and Garmin, Apple Inc. has also entered the market with its Apple Watch, which made its debut earlier this year.

Fitbit’s devices, which track daily steps taken and calories burned as well as sleep duration and quality, are indicative of the consumer trend toward health and fitness. Several fund managers and analysts considering the IPO admitted they use the device.

The deal was led by Morgan Stanley, Deutsche Bank and Bank of America Corp. Shares are set to begin trading Thursday morning on the New York Stock Exchange under the stock symbol “FIT.”

FitBit (FIT) is 5% lower Wednesday morning, and Global Equities Trip Chowdhry doesn’t see the situation getting any better.

Chowdhry urges fundamental investors to take profits now, calling it a “hyper-inflated” stock whose IPO pop represents its peak.

He calls it the next Box (BOX), Alibaba (BABA), Groupon (GRPN) and GoPro (GPRO), and not in a complimentary way:

Remember “BABA is taking over USA and is going to Kill Amazon (AMZN)” … AMZN is all time high; Remember “Zynga (ZYGA) is revolutionizing the gaming Industry, going to kill EA (Electronic Arts) ….EA is all time high; Remember “BOX is going to Kill Sharepoint” …BOX is self destructing and probably going to be a $5 stock.

He argues that FitBit is directly competing with Xiaomi’s $15 band, which is going to put tremendous pressure on pricing, and that the market is “extremely limited” for single-purpose and –application devices.

Chowdhry thinks FitBit’s fair value is two times revenue “at best,” and investors interested in fundamentals should take the opportunity to get out of the stock before it falls further.

The company also announced that at its request, Morgan Stanley agreed, on behalf of the IPO underwriters, to release lockup restrictions for Fitbit employees and consultants as of October 31. This amounted to about 2.3 million shares, or 10% of the common stock.

The release is effective November 4.

Fitbit Intends to File Registration Statement for Proposed Follow-On Offering

11/02/2015

SAN FRANCISCO--(BUSINESS WIRE)-- Fitbit, Inc. (NYSE:FIT) today announced that it intends to file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) on November 2, 2015 relating to a proposed underwritten follow-on public offering of its Class A common stock. Fitbit is proposing to sell 7,000,000 shares and certain selling stockholders are proposing to sell 14,000,000 shares. In addition, the selling stockholders will grant the underwriters a 30-day option to purchase up to an additional 3,150,000 shares. Fitbit will not receive any proceeds from the sale of the shares by the selling stockholders.

The principal purposes of the proposed offering are to increase Fitbit’s financial flexibility, obtain additional capital, facilitate an orderly distribution of shares for the selling stockholders, and increase Fitbit’s public float. The proceeds of the primary portion of the proposed offering will be used to provide additional working capital for Fitbit and for other general corporate purposes, including research and development and sales and marketing activities, general and administrative matters, and capital expenditures. As part of the underwriting procedures, all selling stockholders, as well as all executive officers and directors, will agree to enter into lock-up agreements for a period of 90 days following the proposed offering.

Wearable fitness device maker Fitbit Inc's revenue nearly tripled in the third quarter, helped by strong demand from markets outside the Americas.
However, the company's net income fell to $45.8 million, or 19 cents per share, in the quarter ended Sept. 30 from $68.9 million, or 34 cents per share, a year earlier.
Revenue rose to $409.3 million from $152.9 million.