Fitbit has been marketing its share sale to investors since the early part of June. Before its initial public offering (IPO) on the stock market, it has seen share offers as high as $16 each, but a prospectus filed this past Tuesday noted that the price has soared up to $19 each. This means that the company's IPO could reach as high as $656 million if it creates 34.5 million Class A shares upon release.
An IPO of that magnitude would allow Fitbit to reach an overall value of approximately $3.9 billion. This is an impressive number for any company, and Fitbit may be worth every penny if it can convince potential investors that it will keep growing.
As one of the top manufacturers of wearables, Fitbit has shown everyone that it can grow to profitability. Unlike some other companies that continue to bring in revenue but ultimately experience a net loss, Fitbit ended 2014 with $745 million in revenue and $100 million in net income, according to Bloomberg (News - Alert) Business. Following that year of growth, it began in June on a road show of sorts to speak with investors about submitting non-binding bids before its IPO was announced. Investors showed that they were willing to commit to a share price, that would allow bankers to adjust the value of the IPO—thus the raise from a possible $16 to $19 per share.
Those bankers include Morgan Stanley, Deutsche Bank AG, and Bank of America Corp. They would be controlling the IPO which would reside in the New York Stock Exchange under the handle FIT.
More than just the excitement of going public, an IPO would place Fitbit in the company of other wearables manufacturers such as Apple (News - Alert), Garmin, Samsung, and GoPro. TMC previously reported that, although it has some growing competition in the wearables market, Fitbit is the top contender with the most shipped units globally with a market share of 34.2 percent in Q1 2015. Its top contender in the quarter was Xaiomi with its Mi Band that captured 24.6 percent of the market.
The TMC (News - Alert) Wearable Technology Conference & Expo will take place July 13 - 15 and will feature a number of presentations that include mention of wearable such as those that Fitbit produces. Notably, those presentations include “Fitness Craze: Making Sense of the Trackers” which is—just look at the name—what Fitbit activity trackers are all about. Other talks will cover the issues of battery power, health risks, the future of wearable fitness, and many other topics. This will come alongside keynote speeches and opportunities for attendees to play with demos of some wearable products available at vendor booths.
Edited by Dominick Sorrentino
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