Just days before its expected IPO, San Francisco-based Fitbit disclosed in another amended SEC filing that it will increase the price of its shares to between $17 to $19, which would see the company itself raising up to $425 million in its IPO. Its current stockholders would stand to make $230 million if it is priced at the high end of its range -- for a total IPO worth upwards of $655 million. Fitbit has been approved to debut as “FIT” on the New York Stock Exchange.
In previous filings, Fitbit disclosed that it would price its shares between $14 to $16, which would see the company itself raising up to $358 million.
The company also disclosed, in the most recent filing, that the its directors, executive officers, and significant stockholders will hold around 52.8 percent of Fitbit’s capital stock, up from 51.9 percent. And while Fitbit will still sell 22.4 million shares itself, the company’s stockholders will now sell 12.1 million shares, up from 7.5 million shares.
After deducting estimated underwriting discounts and commissions as well as estimated offering expenses that Fitbit is paying, the company estimates that the net proceed from the sale of shares will be $373.9 million. This is based on an assumed initial public offering price of $18 per share, the midpoint of the price range.
As noted above, if the shares are priced at $19, the total amount raised in the IPO for both Fitbit and its stockholders could hit a total of nearly $655 million. The Wall Street Journal reported that the total amount raised could reach $750 million, but their calculation includes the company's over-allotment option, which allows its underwriters to sell additional shares in the days following the IPO.
The newest version of the filing also admits for the first time that Fitbit may face competition from "manufacturers of lower-cost devices, such as Xiaomi and its Mi Band device". Earlier this month, a report from research firm IDC estimated that Fitbit has 34.2 percent market share in the worldwide wearable device market, but Xiaomi was right behind Fitbit with 24.6 percent market share, even though Xiaomi had just started shipping devices during the second half of 2014.
Fitbit initially filed for its IPO in early May. In its first filing, the company revealed that, since its founding in 2007, Fitbit had sold more than 20.8 million devices as of the end of March 2015. The company offers a half dozen fitness tracking wearables, but also offers a connected weight scale, the Aria, which has FDA clearance.
Fitbit is in 45,000 retail stores in more than 50 different countries. The company said that of its retailers and distributors, Wynit Distribution, Best Buy, and Amazon.com accounted for approximately 13 percent, 12 percent, and 11 percent, respectively, of its revenue last year. For the first three months of 2015 those three accounted for about 19 percent, 10 percent, and 11 percent of its revenue.
The company, which is profitable, had revenues of $14.5 million in 2011, $76.4 million in 2012, $271.1 million in 2013, and $754 million in 2014. It posted a net loss for the first three of those years but net income of $131.8 million last year. It also posted an adjusted EBIDTA of $79 million in 2013 and $191 million in 2014. For the three months of 2015, Fitbit posted revenues of $336.8 million, net income of $48 million, and adjusted EBITDA of $93.4 million.
Just a few weeks after Fitbit filed its IPO, one of its biggest competitors, Jawbone, sued Fitbit. Jawbone alleges that Fitbit poached employees who downloaded sensitive data about Jawbone before leaving the company. A week ago, Jawbone sued Fitbit again, this time over alleged infringement of three patents Jawbone obtained when it acquired BodyMedia in 2013.
