Fitbit, the fitness wearable manufacturer, has come out of the starting blocks like a champion sprinter since its initial public offering. Less than a week after its debut on 18 June, the value of the company’s stock has almost doubled.
Fitbit Inc. (FIT, +1.59%) priced its IPO at $20.00 a share a day before debut on the New York Stock Exchange where it opened at $30.40 and has been going like a true champion, enjoying a great run since then.
According to Leslie Picker of Bloomberg, there are certain similarities between Fitbit and Blackberry when it made its IPO on the Toronto Stock Exchange back in 1997. Blackberry was an established market leader faced with opposition from Apple, very much the same situation Fitbit finds itself in today.
Angelo Zino, an equity analyst with New York based S&P Capital IQ said, “Blackberry’s failure was the that they weren't able meet the expectations that consumers were looking for and keep up with the times.” He added, “Fitbit has to find a way to defend the position they've built here.”
Meanwhile, Renaissance Capital LLC Chairperson, Kathleen Smith, told MarketWatch that Fitbit was amongst the best performing public offerings of 2015. The stock was behind top performers like Shake Shack Inc. (SHAK, -3.33%) which has increased more than 200% since its IPO, and Sparks Therapeutics Inc. (ONCE, -1.03%) is 191% higher that its IPO.
Another comparison that can be made that puts the Fitbit stock performance into perspective is to that of another Silicon Valley wearable-tech firm , GoPro (GPRO, -0.05%).
GoPro, which went public almost a year ago, has a market value of approximately $7.4 billion compared to the Fitbit market value of around $7.6 billion, according to data from FactSet. Both companies also turned their earlier success as private companies into a spectacular debut and equally awe inspiring first four days of trading.
Getting to the head of the pack is one thing, but in order to maintain its position and excellent standard of financial health, Fitbit will need to employ a portion of the capital from the IPO to fund research and development programs. This will be essential in order to maintain the edge they have over the competition. For now investors seem pretty confident that all will be well with Fitbit going into the future.