Apparently, investors think, Fitbit, the maker of fitness-tracking bracelets, is in pretty good shape.
Shares of the company jumped as much as 60% in their debut Thursday, valuing the company at $6.5 billion.
The stock opened up 52%, putting it among the 10 biggest opening pops for an IPO so far this year, according to data from Dealogic (see the chart below for the rest). U.S. burger chain Shake Shack, which went public in January, saw the biggest pop with a 124% gain.
On Wednesday night, the company said it had priced its initial public offering at $20 a share, exceeding its prior estimates. Earlier this week, it said it would likely sell its shares in the $17 to $19 range. That was step up from Fitbit’s initial projections of $14 to $16 a share.
The IPO raised nearly $740 million for the fitness device maker. The deal could generate another $100 million for the company if underwriters exercise their over-allotment option to sell additional shares, which they normally do, especially in a hot deal.
The Fitbit deal has turned out to be more popular than many expected, including the company, which along with raising the price of the deal twice, is also selling more shares than expected. Some observers had feared that increased competition in the wearable device market, especially from Apple, would dampen investor demand for the offering.
But Fitbit’s strong financials likely convinced investors to buy in. Fitbit is one of the few companies to have gone public this year that are profitable. Sales at the company rose 174% last year to $745 million. And investors didn’t seem to be bothered by the company’s use of an accounting metric that seemed to selectively exclude the cost of a recent recall.
Fitbit is the second U.S. wearable technology company to go public, following action camera-maker GoPro hugely successful listing around this time last year.
The stock started trading Thursday morning on the New York Stock Exchange with the symbol “FIT.” The IPO was led by Morgan Stanley, Deutsche Bank and Bank of America.
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