Fitbit, the wearable fitness tracker, has raised its share price the day before the company s highly anticipated initial-public offering.
Fitbit on Tuesday bumped share prices from a range of $14 to $16 up to a range of $17 to $19 — a 21 percent jump that signals there is no shortage of investors eager for a stake in the first wearables company to go public.
At the middle of the new price range, or $18 per share, the San Francisco-based company will raise $403 million, and up to $621 million if bankers sell additional shares. At that mid-point price, Fitbit s valuation would reach $3.7 billion, and if the final price set Wednesday evening is higher still, its valuation could easily soar above $4 billion. That would put the company in line with the valuations of Cloudera and Zenefits.
Fitbit is set to begin trading Thursday on the New York Stock Exchange under the ticker symbol FIT. It will be the third tech IPO from Silicon Valley for 2015 — following Box and Apigee — in what has become a sluggish year for public offerings. By the end of June 2014, there had been 11 tech IPOs from Silicon Valley.
Fitbit s IPO will very likely become the largest consumer hardware deal ever, followed by both GoPro, .
The company s price hike suggests investors are not deterred by two lawsuits recently filed against Fitbit by rival Jawbone, which argue that Fitbit infringed on Jawbone patents, poached its employees and stole intellectual property. Jawbone is attempting to halt Fitbit shipments in the U.S.
Fitbit has emerged as the market leader in the growing sector of wearable technology that includes watches, wristbands and other accessories that track body functions and physical activity. Fitbit, which starts at less than $100, counts the users steps, distance, calories burned and other movements.
The company has 34 percent of the wearables market, according to research firm IDC. Fitbit shipments grew 129 percent from 1.7 million in the first quarter of 2014 to 3.9 million in the first quarter of this year.
The entire wearables market is surging, and Fitbit will confront more and stronger competitors. The Consumer Electronics Association predicts 10.8 million wearable devices will ship in 2015, up from more than 3 million last year. Technology research firm Gartner predicts that 70 million to 100 million devices will be purchased in 2016.
Photo: Fitbit Flex
