Fitbit May Sell Itself: Reuters

September 20, 2019 | Headlines, Takeovers and Buyouts
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Wearable device maker Fitbit may be exploring the feasibility of a sale as competitive pressures mount.

Fitbit has been talking to boutique investment bankers Qatalyst Partners on the subject of engaging with likely acquirers, said Reuters.

Unfortunately, Fitbit finds itself somewhere between a rock and a hard place.

Its smartwatches face competition from industry biggies Apple and Samsung. On the other hand, in the fitness tracking sector, nimble Chinese companies such as Huawei and Xiaomi are snapping at its heels with cheaper products.

Wearable device maker Fitbit may get love from Google or PE players

According to the Reuters report, Qatalyst has been trying for some time to bring Fitbit around to the idea of a sale. It’s lure: possible interest from Alphabet Inc, the holding company of Google, and private equity investors.

However, Fitbit has not yet made up its mind, and may never consider a sale. Reuters could not elicit any comments on the subject from any of the above parties.

Fitbit shares surge

Unsurprisingly, news of the likely sale lit a fire under the Fitbit stock. It closed Friday at $4.10, up 11.72%.

However, in its second quarter, Fitbit reported revenue of $313.56 million, up 4.75% year on year, beating market expectations by $1.96 million. Similarly, EPS was $-0.14, which beat by $0.04.

“While we are disappointed to lower guidance for the year, we remain confident in our long-term transformation strategy and have demonstrated good results across key areas of the business,” Fitbit said in the Q2 earnings result.

For the full year, the company lowered the midpoint of its 2019 revenue guidance by $95 million to $1.455 billion.

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