Fitness wearables maker Fitbit is due to list on the New York Stock Exchange later this week, in what is being widely lauded as the pick of this year’s tech IPOs. The buzz surrounding the deal has led it to become multiple times oversubscribed, days before the pricing is finalized.
In wake of the solid investor appetite, Fitbit has raised its IPO price range and offering size. The company will now sell 34.5 million shares priced between $17-19 each, as compared to the previously offering guidance of 29.9 million shares at $14-16 each. This means that at the midpoint of expected range, Fitbit will raise $621 million, ahead of the $448 million expected to be raised previously.
The pricing of Fitbit’s IPO is said to be finalized late on Wednesday, and shares will start trading the following day. Thursday’s debut will make Fitbit the first publicly traded pure play in the wearables market. Morgan Stanley (NYSE:MS), Deutsche Bank AG (NYSE:DB), and Bank of America Corp (NYSE:BAC) are the deal’s top underwriters.
Fitbit stands to gain from its market leadership position in one of the technology sector’s fastest-growing segments – wearables. The company tripled its top line year-over-year (YoY) to $336 million in 1QCY15. This is in line with the overall growth in global wearables market, which according to IDC, shipped 11.4 million units in 1QCY15, as compared to 3.8 million in the corresponding period a year ago.
That said though, the increasingly lucrative wearables market is getting packed with more entrants, which poses a threat to Fitbit’s dominance. The company, which had 44.7% of the market share in the first quarter of 2014, now has its market share reduced to 34.2%. Chinese smartphone giant, Xiaomi, recently released its fitness tracking bracelet MiBand. The widespread success of the inexpensive device led Xiaomi to a quarter of the market share in 1QCY15, in only a short period following MiBand’s July 2014 unveiling.
The company only turned its first annual profit last year (of $132 million), it still is the clear number one in the global wearables market (although its lead is declining), and the US IPO market is gaining momentum. Fitbit stock will start trading at NYSE as “FIT” on Thursday.