Fitbit Inc. ($FIT) Stock | Stock Collapses Over 18% with Release of New Smartwatch and Announcement of Class Action Lawsuit

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Fitbit Inc. (NYSE: FIT)

 

 

Fitbit Inc. (FIT), a company that manufactures wearable fitness tracking devices, yesterday debuted their new smartwatch called Blaze. Blaze will retail for $199 and will be available in March.  In addition  a class action lawsuit was filed against Fitbit claiming inaccurate heart monitor readings on their wrist based devices the Charge HR and Surge.

 

Fitbit Inc. CEO’s Comments

“Fitbit CEO James Park told Fortune that the decision to limit the Blaze’s functionality was a conscious effort to not overcomplicate the device. According to Park the problem with current smartwatches is that they do too much, which, in turn confusing users. Fitbit’s goal was to create a smartwatch that did just enough, while remaining focused on health first and foremost, he said.”  Fortune

 

Chief Business Officers Comments:

“It’s really going to ignite the world of fitness,” Fitbit’s Chief Business Officer Woody Scott said at a press conference. “It’s the most advanced, smartest, motivated, stylish product yet.”  The Street

 

FIT Technical Analysis

FIT Chart

FIT gapped up in price yesterday to $30.21, up from the prior day’s close of $29.76, which is a 2% increase. As of late Tuesday afternoon trading in FIT was down over 18%, trading at $24.30. Taking a look at the daily chart we can see that we are in unchartered territory as FIT is trading at all time lows. The stock plummets amidst the news of FIT releasing its new smartwatch called Blaze at the Consumer Electronics Show. Fitbit’s Blaze looks very similar to the Apple Watch. Analysts and Investors seem worried that Fitbit may have bitten off more than they can chew, as their new product will be in direct competition to Apple’s Watch. While other companies, such as Under Armour and Fossil Group, have also released new products that will directly compete with Fitbit in fitness tracking devices. Fitbit has been the leading seller of wearables, but has seen their market share fall from 33% last year to 22% in the third quarter of 2015.  Additionally late afternoon on Tuesday there was a class action lawsuit filed against Fitbit, claiming that its wrist based heart monitors the Charge HR and Surge do not accurately record correct heart rates during intense physical activity, which strikes right at the heart of their core business (no pun intended). FIT has a float of 54.56 million shares and is trading 6 times the normal daily trading volume. For trading purposes, I would like to see where the stock opens on Wednesday morning and would be looking for a good possible short entry at $24.

 

Company Profile

Fitbit Inc. manufactures and provides wearable fitness-tracking devices worldwide. The company makes both wrist bands and clippable devices that monitor a user’s fitness activity by tracking the calories burned or distance covered. It manufactures and markets products that track people’s health and fitness activities, including Fitbit Zip, a wireless tracker that allows users to track daily activity statistics, such as steps, distance, calories burned, and active minutes; Fitbit One, a clippable wireless tracker, which tracks stairs climbed and sleep; Fitbit Flex, a wristband-style tracker that tracks steps, distance, calories burned, active minutes, and sleep; and Fitbit Charge, a wireless activity and sleep wristband, which tracks steps, distance, calories burned, active minutes, floors climbed, and sleep. The company also provides Fitbit Charge HR, a wireless heart rate and activity wristband; Fitbit Surge, a fitness watch that consists of GPS watch, heart rate tracker, activity tracker, and smartwatch; and Fitbit Aria, a Wi-Fi connected scale that tracks weight, body fat percentage, and body mass index. In addition, it sells various accessories, such as bands and clips, charging cables, and Fitbit apparel. Fitbit Inc. sells its products primarily through retailers and distributors. The company was formerly known as Healthy Metrics Research, Inc. and changed its name to Fitbit, Inc. in October 2007. The company was founded in 2007 and is based in San Francisco, California.  Yahoo Finance

 

 

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