Fitbit Inc. FIT , a Zacks Rank #4 (Sell), fell almost 17% to its all-time low this afternoon, trading at $5.95 per share. Investors are selling off after Fitbit announced they will increase lay-offs and not meet expected fourth quarter results.
The fitness and wearable technology company announced that they will cut 10% of their workforce, which is double from the previously expected 5% cut. Fitbit is based in San Francisco, California and employs 1,630 workers. A 10% cut would mean a layoff of 160 employees; this firing spree is in hopes of cutting costs by $200 million.
Also, Fitbit announced today that they will significantly miss their Q4 earnings estimates. Originally guidance showed sales to be expected between $725 million to $750 million and now are expected to be in the range of $572 million and $580 million. They will report earnings on February 22 nd .
The company has experienced quite a turn of events in the past year. Their stock has lost more than 60% of its value, making its 52-week trading range between $5.95 - $18.85. Fitbit attempted to stay competitive by acquiring competitors Vector and Pebble while being in conversation with Jawbone.
Additionally, they have released new wearable technology like the Charge 2 and Flex 2, which were expected to be drivers of holiday sales. It looks like products such as Apple's (AAPL) Apple Watch are making it difficult for Fitbit to stay up to speed.
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