Fitbit’s IPO has Estimated Valuation Of $3.3 Billion And Could Raise $500 Million

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Fitness wearables maker Fitbit could raise $500 million through an initial public offering (IPO) that would value the company at $3.3 billion. The company updated its IPO filing stating that it intends to offer about 30 million shares priced in the range of $14 to $16. The company has also granted underwriters the opportunity to access another 4.5 million shares to satisfy oversubscription in case of high demand for the stock.

If the underwriters exercise their option to purchase addition shares amid strong demand, Fitbit’s IPO is expected to generate $500 million and put the company’s valuation at $3.28 billion, larger than GoPro Inc (NASDAQ:GPRO)’s $3 billion nearly a year ago.

GoPro set IPO record in consumer electronics

Last year, GoPro Inc (NASDAQ:GPRO)’s IPO was the most valuable in Silicon Valley’s consumer electronics sector from at least 1991, when Duracell raised $433 million in its IPO. GoPro’s IPO raised $491.3 million after the underwriters purchased additional shares to satisfy strong demand for the stock.

Fitbit and GoPro Inc (NASDAQ:GPRO) are a different breed of consumer electronics companies in that they already enjoy large revenues and profits at a young age. In 2014, Fitbit’s revenue almost tripled to $745.5 million and profits came in at $131.8 million. The company has set its eyes to generate more than $1 billion in revenue this year.

Competition in the fitness wearable market

As Fitbit plans to go public, questions have been asked about its future in the health and fitness wearable market. The company is set to face the might of Apple Inc. (NASDAQ:AAPL) which has come with what looks to be a more capable wearable, called the Apple Watch. In addition to supporting health and fitness functions like being able to track heart rate, Apple Watch also supports a number of other functions like music streaming and working as an extension of the iPhone, which could entice many consumers to go fit or ditch Fitbit.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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