Fitbit Inc. (NYSE: FIT)
Fitbit Inc. News
Today Fitbit Inc. (FIT) announced that they would be developing a smart watch that will be in direct competition with Apple’s smart watches, which investors were not impressed with, and to top it off there has been a class action lawsuit filed by consumers. The lawsuit states that the heart rate monitor in the watch is inaccurate by a “significant margin” for the Surge and Charge HR products. This does not bode well for the company and the selling pressure is mounting up for the stock.
I think the only way they will be able to compete with the most valuable company in the world is to differentiate the watches into a fitness niche. With a price point of $199 they are cheaper than the Apple watches but they also don’t have apps that a lot of people crave so we’ll have to wait and see how consumers respond to their new product. One thing that concerns me is that consumers may be put off by this lawsuit, which will weaken demand for their watches resulting in soft sales and wasted efforts. Time will tell.
Chief Business Officer Comments
“Its not about all the extras or putting everything from your phone on your wrist,” Edward Scal said, later adding, “What you need to maximize your workouts is a tool, not a toy.” (MarketWatch)
FIT Technicals
Shares of FIT took a pounding today after starting the day green at $30.21 compared to yesterdays close of $29.76 when the announcement of their new smart watch that is to compete with Apple’s smart watches. Shares reached highs of $30.96 right after the open and then immediately began to sell off, reaching lows of $24.02 right before the close and finishing the day down at $24.30 or just over 18%. Today FIT reached all time lows since their initial public offering back in June of 2015 and I don’t think it’s going to stop here. For now, I see support coming in at the $24 range with resistance at $26.50 and the $28 levels.
Looking back on the daily chart, you can see that FIT IPO’d at $30.40 and reached highs a couple months later at $51.90 before it began the new trend south. There has been a lot of consolidation between the $35 and $40 levels but now that it has reached new lows we’ll have to see where the sellers step down and allow the price to settle. Right now, the only side I would be is short on this stock so we’ll have to see if we can get a relief bounce for out entry. Currently analysts have an average price target of $49.13.
Company Profile
Fitbit, Inc. is engaged in the development of wearable device, which tracks data of an individual’s health. It offers products, which can track a person’s activities, such as calories burned, sleep quality, steps, and distance. The data collected allows an individual to monitor their progress towards their own personal goals. The company was founded by Eric Friedman & James Park in 2007 and is headquartered in San Francisco, CA. (MarketWatch)
