Why Fitbit Stock Popped (Again) Today

What happened

After soaring more than 30% on Monday following a reported acquisition offer by Google parent Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), shares of Fitbit (NYSE: FIT) climbed another 7.3% Tuesday amid speculation over both the exact price of the offer and other prospective suitors for the wearable device specialist.

So what

For perspective, yesterday's pop came after Reuters first broke the news of Alphabet's bid, citing "people familiar with the matter." But the report also cautioned there's no guarantee a deal will be reached, noting "the exact price that Google has offered for Fitbit could not be learned."

Considering Fitbit didn't immediately confirm as much, this left investors to wonder whether the company was negotiating for an even juicier acquisition premium.

Woman drawing large yellow fish eating smaller yellow fish.


Ironically stoking the move was a note yesterday from Morgan Stanley analyst Katy Huberty, who reiterated her "underperform" rating on the stock with a $3.20-per-share price target, but simultaneously pointed out Fitbit "could possibly be attractive to a buyer" given its "valuable IP in wearables," existing partnerships with healthcare companies and providers, and its trove of data collected from its portfolio of wearable devices.

Now what

To be fair, this shouldn't be entirely surprising. When Reuters initially reported news of Google's interest last month, I argued that Fitbit might also make a good acquisition target for competitors in the space including Nike and Apple -- though if Fitbit had to choose, I still think Google represents the best strategic fit.

In any case, with Fitbit poised to release third-quarter results next week, I suspect it won't be long until we hear more about what Google -- or some other acquirer -- hopes to bring to the table.

10 stocks we like better than Fitbit
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Fitbit wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 1, 2019


Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Fitbit, and Nike. The Motley Fool has the following options: short January 2020 $155 calls on Apple and long January 2020 $150 calls on Apple and recommends the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More