Fitbit Boosts IPO Price Range To $19 Per Share

(RTTNews) - Fitbit Inc., a maker of wearable fitness-tracking devices, has increased the estimated price range for its initial public offering of common stock.

Fitbit said Tuesday in a regulatory filing that it has raised the estimated price range for its IPO to $17 to $19 per share from the prior range of $14 to $16 per share. The revised price range would give Fitbit a valuation of nearly $4 billion.

The company is offering 22.39 million shares of its Class A common stock in the IPO. Meanwhile, the number of common stock being offered by selling stockholders has now been increased to 12.11 million shares from 7.46 million shares.

The number of common stock that the underwriters have an option to purchase from selling stockholders to cover over-allotments has also been increased to 5.18 million from 4.48 million shares.

San Francisco-based Fitbit filed to go public in May, and aims to list its Class A common stock on the New York Stock Exchange under the ticker symbol 'FIT.'

Fitbit has estimated net proceeds from the IPO to be about $373.9 million, based on the midpoint of the range. The company plans to use net proceeds from the offering for working capital and other general corporate purposes, including research and development, and capital expenditures.

Morgan Stanley, Deutsche Bank and Bank of America Merrill Lynch are acting as lead underwriters to the offering.

The core of Fitbit's platform is its family of six wearable connected health and fitness trackers. These wrist-based and 'clippable' devices automatically track, among other things, users' daily steps, calories burned and distance traveled, and display real-time feedback to encourage them to become more active in their daily lives.

Fitbit, founded in 2007, sells its products in over 45,000 retail stores and in more than 50 countries. The number of devices sold by the company grew to 10.9 million in 2014 from 4.5 million in the previous year.

Fitbit's net income for 2014 was $131.8 million, compared to net loss of $51.6 million in the prior year. Revenue for the year surged to $745.4 million from $271.1 million in the previous year.

The total number of registered users on the company's platform was 19 million by end of March 2015, up from 14.6 million as on December 31, 2014.

However, Fitbit is facing stiff competition from longtime rivals such as UP maker Jawbone as well as new competition from Apple Watch and Android-powered smartwatches. The company specifically mentioned in its prospectus that the recently-introduced Apple Watch was posing stiff competition.

Consumer electronics companies have seen strong investor demand when they have gone public. Action sports camera maker GoPro Inc. (GPRO) priced its IPO at the top end of its expected range, at $24 per share. As of Monday, the company's shares closed trading at more than double its debut price.