Fitbit, Inc. (FIT) Falls Sharply on Negative Assessment of New Watch
Shares of San Francisco, California, based Fitbit, Inc. (FIT) dropped on Tuesday, against the backrop of a quiet day in stocks overall. Fitbit's stock was down 18.35%, losing $5.46 per share, to close at $24.30, on volume of 30,670,352 shares. The company's announcement of the rollout of its newest product was greeted by some less than positive reviews.
On Tuesday the company unveiled its Fitbit Blaze smart fitness watch, describing it as "its smartest, most stylish, most motivating fitness tracker yet". The watch was made available for presale, with retail availability beginning in March, 2016. The watch was revealed at the 2016 Consumers Electronics Show in Las Vegas. Analysts however, didn't share Fitbits enthusiasm, and offered less than positive assessments of the watch, causing the company's stock to sell off. The stock price fell to its lowest level since its June 17 initial public offering.
Sterne Agee CRT described the Blaze as more of a "fashionsable Charge fitness band than a big TAM expander nor net new driver of FIT's ultimate platform." They aslo noted that while the Blaze is priced much lower than the Apple Watch, is has a much smaller amount of the functionality. The most damaging assessment described the Blaze as "a not-so-smart watch with limited apps perform play." Meanwhile, TechCrunch noted that Blaze lacks direct GPS capability, and may cost more than Fitbit's Surge once the watch has been customized with various bands.
Commenting on the new product rollout, Fitbit CEO and Co-Founder, James Park noted, "One of the first things we learned in this industry is that fitness is personal – and if something isn’t your style, you won’t wear it, With Fitbit Blaze, we pushed the boundaries of what’s possible to create a beautiful, versatile device that can be customized to fit your personal style – while packing a powerful fitness punch to help you reach your goals. Fitbit Blaze delivers a combination of innovative features that were carefully selected with intention and purpose, designed to motivate and offer a fitness experience that is more effortless and more useful with advanced guidance and coaching.”
Fitbit may also be facing some a legal challenge on other products. It's Charge HR and Surge heart rate monitors are alleged to be incapable of providing consistent recording of heart rates during heavy physical activity - which is the very purpose of both devices. A nationwide class action suit has been filed against Fitbit by consumers in California, Colorado and Wisconsin. The suit contends that accurate heart rate readings are critical, particularly to those who must monitor their hearts due to medical conditions.
Fitbit has responded to the class action lawsuit with the following statement:
"We do not believe this case has merit. Fitbit stands behind our heart rate technology and strongly disagrees with the statements made in the complaint and plans to vigorously defend the lawsuit. Fitbit is committed to making the best clip and wrist-based activity trackers on the market. Our team has performed and continues to perform internal studies to validate our products’ performance.
PurePulse provides better overall heart rate tracking than cardio machines at the gym, as it tracks your heart rate continuously -- even while you’re not at the gym or working out. But it’s also important to note that Fitbit trackers are designed to provide meaningful data to our users to help them reach their health and fitness goals, and are not intended to be scientific or medical devices."
Other News FITCan Fitbit Keep Time With Apple?
Fitbit’s move into smartwatches might seem ill-timed given Apple’s dominance in this area, but don’t count the company out just yet.
Fitbit: Why Insiders Sold Out Prior To The Holidays
The strong ecosystem makes the Fitbit story compelling, but the recommendation remains to wait until the holiday enthusiasm falls off.
Other Stocks in the NewsTwitter plans to increase 140-character tweet limit
The company is planning to extend its 140-character limit to as many as 10,000.
Apple Scales Back Orders for Its iPhones
Apple Inc. is scaling back orders for its iPhones, sending ripples throughout the multibillion-dollar industry that supplies and builds the company’s phones.