Fitbit IPO Terms Now Flirting With $550 Million Stock Sale

Fitbit Inc. filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). The company set terms in this filing, proposing a maximum offering price of $16 per share, which translates to a total value of $549.2 million. Fitbit intends to list on the New York Stock Exchange (NYSE) under the symbol FIT.

The underwriters for the offering are Morgan Stanley, Barclays, Piper Jaffray, Deutsch Bank, Raymond James, Stifel, SunTrust Robinson Humphrey, Merrill Lynch and William Blair.

The Fitbit platform combines connected health and fitness devices with software and services. It also includes an online dashboard and mobile apps, data analytics, motivational and social tools, personalized insights and virtual coaching. Fitbit appeals to a large, mainstream health and fitness market by addressing these key needs with advanced technology embedded in simple-to-use products and services.

The company pioneered the connected health and fitness market starting in 2007, and since then, it has grown into a leading global health and fitness brand. At the end of March 2015, Fitbit had sold over 20.8 million devices since it began. According to The NPD Group, this company held the leading position in the U.S. connected activity tracker market, with an 85% share, by dollars, in the first quarter of 2015.

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Users can sync their Fitbit devices with, and view their dashboard on, their computers and over 150 mobile devices, including iOS, Android and Windows Phone products. This has enabled the company to attract a large community of connected health and fitness device users. The size of its user community increases the likelihood that the users will be able to find and engage with friends and family, creating positive network effects that reinforce Fitbit’s growth.

These products are sold in over 45,000 retail stores and in more than 50 countries, through its online store, other retail websites and as part of its corporate wellness offering. In 2011, 2012, 2013, and 2014, it had revenue of $14.5 million, $76.4 million, $271.1 million and $745.4 million, respectively. At the same time the company had net income (loss) of $(4.3) million, $(4.2) million, $(51.6) million, and $131.8 million, respectively.

The number of devices sold grew from 0.2 million in 2011 to 1.3 million in 2012, 4.5 million in 2013 and 10.9 million in 2014, and from 1.6 million in the three months ended March 31, 2014, to 3.9 million in the three months ended March 31, 2015. Also Fitbit had 0.6 million, 2.6 million, 6.7 million and 9.5 million active users as of December 31, 2012, 2013 and 2014, and March 31, 2015, respectively.

Fitbit intends to use the net proceeds from this offering for working capital and other general corporate purposes, including research and development and sales and marketing activities, general and administrative matters and capital expenditures.

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