By Neha Dimri
(Reuters) – Shares of Fitbit Inc , a maker of popular wearable fitness-tracking devices, ran up as much as 60 percent in their debut, valuing the company at $6.5 billion.
Fitbit is the second U.S. wearable technology company to go public, following action camera-maker GoPro Inc’s hugely successful listing around this time last year.
Fitbit’s colorful wireless wrist bands and clippable devices track heart rate, calories, sleeping patterns and step counts.
President Barack Obama has been spotted wearing the Fitbit Surge watch, the highest selling GPS fitness watch in the United States in the first quarter of 2015.
The eight-year-old company had sold over 20.8 million devices as of March 31, of which more than half were in 2014 as the wearable technology craze took off.
While Fitbit faces stiff competition from device makers such as Garmin Ltd , Jawbone and Misfit, its biggest challenger could be Apple Inc’s recently launched Apple Watch, which sports several health-related features and apps.
“Fitbit’s success will be closely watched, just like the sales of the Apple watch, to really give investors a better sense of how viable and sustainable this market is,” CLSA analyst Ed Maguire said.
About 126 million wearable devices are expected to be shipped in 2019, representing nearly $28 billion in revenue, according to IDC. In 2014, 19.6 million units were shipped.
Fitbit said in its IPO filing it had an 85 percent share in dollar terms of the U.S. connected activity tracker market in the first quarter of 2015, citing data from NPD Group.
The company’s revenue almost tripled to about $745 million for the year ended Dec. 31. Fitbit reported net profit of $131.8 million, compared with a loss of $51.6 million.
The company raised about $731.5 million by selling 22.4 million of the 36.6 million class A shares offered. The stock was priced at $20 per share, above the top end of the expected price range of $17-$19.
Co-founders James Park, who is also Fitbit’s CEO, and Eric Friedman each own 11.2 percent of class B shares. Between them, they reaped about $31 million from the offering.
Venture capital firm Foundry Group Funds, which holds a 27 percent stake in the company, raised $130.3 million from the IPO.
The stock hit a high of $31.90 in early trading on the New York Stock Exchange on Thursday.
Morgan Stanley, Deutsche Bank Securities and BofA Merrill Lynch were among the underwriters for the IPO.
(Reporting by Neha Dimri in Bengaluru; Editing by Saumyadeb Chakrabarty)