jumped Friday amid reports that the wearable-tech company was exploring a sale with the help of an investment bank.
Fitbit stock (ticker: FIT) closed Friday up 11.9% to $4.10 after Reuters reported that the company, shares of which are down 17% in 2019, had “held discussions” with the investment bank Qatalyst about “whether it should engage with potential acquirers.” CNBC subsequently reported similar information.
The shares were up another 1.9% early in the after-hours session. Fitbit “does not comment on rumor or speculation,” a company spokeswoman told Barron’s. Qatalyst didn’t respond to a request for comment in time for publication.
The reports come as the company tries to navigate its way through both a transition in consumer demand from fitness trackers to smartwatches, and a shift toward a more services-based model from device sales.
Barron’s checked in with the company a few weeks back, noting that revenue and margins that disappointed investors. Some analysts had just about thrown in the towel.
Reuters’s report said Fitbit hasn’t decided to seek a buyer, but has been told by Qatalyst that
(GOOGL) or private-equity firms could be interested. A Google spokeswoman said the company doesn’t comment on rumors or speculation.
Friday’s move in the stock continues a recovery from late-summer lows. The stock has been falling for most of 2019.
Wall Street is cautious. The typical rating on the stock among analysts is Hold. The average target for the stock price, near $5, represents less appreciation than it did as of the close of trading Thursday evening, at $3.66.