Technology wearable business Fitbit has enjoyed another day on the stockmarket. The stock made its market debut yesterday, Thursday, launched at a price of $20. On the first day of trading the shares closed at $29.68, just shy of a fifty percent increase in value. Today, the second day of trading, the stock closed at $32.50, a smaller increase of close to ten percent on the day but an increase nevertheless. The business originally wished to raise $100 million through the IPO, Initial Public Offering, but institutional investors are reported to have been interested in buying stock of the company. Fitbit’s original capital sum was easily surpassed at by the time the IPO came about, Fitbit were able to increase the initial stock price of an indicative $17 to $19 per share to $20 plus release more stock than originally planned, at 36.6 million rather than 34.5 million. The $732 million raised by the IPO makes it the fourth largest flotation so far this year.
Fitbit is the dominant North American wearable fitness player with around 85% of the market. It has been accused by smaller rival Jawbone of poaching large numbers of staff but Fitbit’s defence was a simple, “we don’t need your technology” to Jawbone. Certainly, the company’s wearable fitness technology enjoyed a very successful 2014; the business sold almost 11 million fitness wearable devices and connected scales, which were greater than the sum of all previous years in the San Francisco company’s eight year history. Fitbit have broadened their wearable technology range, but the market has changed in the last twelve months. Both Google and Apple have staked their claim in the wearable technology market and whilst these smartwatches are more expensive than many of Fitbit’s wearable products, they can do a similar function, especially when connected to an application such as Google Fit.
Nevertheless, Fitbit have a proven track record of increasing sales and delivering desirable products to the market. We’ve seen their product range broaden to include the more sophisticated style of wearable device, incorporating both improved health monitoring sensors and traditional smartwatch features. To date, Fitbit’s products closer to a smartwatch have tended to be less functional but have greater battery life than the Android Wear devices.