Tags: fitbit | ipo | stock | pricing

Fitbit Said to Raise $732 Million in IPO Priced Above Range

Wednesday, 17 Jun 2015 07:07 PM

Fitbit Inc., which makes devices that track everything from exercise to sleep patterns, raised $732 million in an initial public offering, pricing its shares above the marketed range.

Fitbit and some of its backers sold 36.6 million shares for $20 apiece, after offering 34.5 million for $17 to $19, a person with knowledge of the matter said. The company had already boosted the price range and size of the IPO on Tuesday, amid stronger-than-expected demand.

Fitbit is going public as a leader in the market for fitness tracking technology. Its popularity helped the San Francisco-based company triple sales in the first quarter, and the company turned profitable last year. Fitbit is valued at $4.1 billion at the IPO price.

The company’s challenge will be maintain its position as competitors from Apple Inc. to China’s Xiaomi Corp. market their own devices. Another rival, Jawbone Inc., is suing Fitbit alleging it infringed on patents, stole employees, and plundered trade secrets.

“They’ve been resilient so far,” said Charles Anderson, an analyst at Dougherty & Co. in Minneapolis, who has a buy rating on Fitbit. “Competition will get tougher every year.”

Research & Development

Fitbit plans to use proceeds for research and development, sales and marketing and capital expenditures. Its devices range in price from the $59.95 clip-on Zip that tracks steps and distance to the $249.95 Surge, which includes a watch, heart rate monitor and can display text messages.

Fitbit also needs to keep its current users active. A third of smartwatch and activity-tracker owners abandon their device after six months of use, according to a survey of 1,700 consumers by consulting firm Endeavour Partners in July 2014. Fitbit said it had 9.5 million paid active users as of March 31 after selling 20.8 million devices since 2011.

The company is offering Class A shares through the IPO, which have one vote per share. Class B shares are held by insiders and represent 98 percent of the voting power, with 10 votes each. Its biggest stockholders prior to the IPO include Foundry Group, True Ventures and SoftBank Corp.

Morgan Stanley, Deutsche Bank AG and Bank of America Corp. managed the offering. The shares will be listed on the New York Stock Exchange under the symbol FIT and begin trading tomorrow.


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Fitbit Inc., which makes devices that track everything from exercise to sleep patterns, raised $732 million in an initial public offering, pricing its shares above the marketed range.
fitbit, ipo, stock, pricing
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2015-07-17
Wednesday, 17 Jun 2015 07:07 PM
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