BUSINESS

Fitbit pumps up investors; shares spike 50 per cent in first day of trading in New York

06/18/2015 10:18 EDT | Updated 06/18/2016 05:59 EDT
NEW YORK, N.Y. - Fitbit flexed some muscle Thursday and its shares rocketed 50 per cent higher in the first day of trading for the fitness tracking gear maker.

Fitbit's initial public offering priced at $20 per share, bringing in more than $730 million and valuing Fitbit at about $4.1 billion in total. The company had already raised its stock price expectations this week and said the IPO would include additional shares, but the offering still surpassed its estimates.

Fitbit Inc. makes devices that can be worn on the wrist or clipped to clothing. They track steps taken, calories burned and other data and can be synced up with smartphones. The company also sells a Wi-Fi enabled scale that tracks body mass and other data.

Fitbit is the biggest-selling company in the young industry. Sales surged to $745 million in 2014, almost tripled its total from the year before, and its first-quarter revenue this year tripled as well. In filings with the Securities and Exchange Commission, Fitbit said it sold 10.9 million devices last year.

The market research company CCS Insight expects 24 million fitness trackers will be shipped in the U.S. this year, and it believes that number will double in 2018.

Jawbone, Nike, Xaomi and Garmin all make rival products, as well as the Apple, and the competition is heating up.

Jawbone filed a pair of lawsuits against Fitbit recently. In May it said Fitbit and a group of its former employees who had jumped ship to join its rival stole trade secrets, business plans and market research, among other things. Earlier this month Jawbone said essentially all of Fitbit's products violate patents belonging to Jawbone.

Jawbone has asked a judge to prevent Fitbit from making and selling those products. Fitbit says it will defend itself against both lawsuits.

Fitbit sold a total of 22.4 million shares, raising $448 million. Its stockholders sold another 14.2 million shares, worth about $284 million.

The stock is trading on the New York Stock Exchange under the ticker symbol "FIT."

The San Francisco company's shares jumped $10.37 to $30.37 early Thursday.