7 On Your Side: Fitbit debuts on NYSE despite recall
SAN FRANCISCO (KGO) -- San Francisco-based Fitbit was the darling of Wall Street Friday. Investors snapped up shares of the company that makes the popular activity trackers, despite Fitbit having to issue a big recall.
7 On Your Side has been reporting on the pioneering wearable technology for over a year because of so many consumer complaints. Thousands of users say they've suffered burning skin irritations from wearing Fitbits. Still, Wall Street swept that issue aside and pumped millions of dollars into the company betting Fitbit will thrive.
Fitbit took great strides of its own this week in a stunning Wall Street debut. Fitbit shares are under the ticker name "Fit" and they began selling at $30 per share, well above the $20 initial price.
The company provided video showing CEO James Park ringing the opening bell, and investors buying up millions of shares on the New York Stock Exchange.
Analysts said it could be one of the top 10 initial public offerings of the year. The company's value is put at more than $6 billion. This comes in spite of some troubles.
As 7 On Your Side first reported last year, the company had to recall its most popular tracker the Fitbit Force when about 10,000 users broke out in severe rashes.
VIDEO: 7 On Your Side Exclusive: Possible cause of Fitbit rashes uncovered
"This big red, angry, itchy spot on my wrist, which at the time I thought was a spider bite," said Fitbit customer Diane Barlow.
Fitbit released three new trackers saying it had eliminated the cause of irritation. However, months later, hundreds more users reported severe rashes with the new products.
"Fitbit promised it would be a rash-free company and that's not what we're really seeing here," Yahoo tech columnist Alyssa Bereznak said.
Those skin irritations didn't seem to bother Wall Street. Fitbit video showed the celebration on Wall Street Friday and a Fitbit-sponsored workout in front of the stock exchange.
Fitbit claims a 68 percent share of the tracker market -- though it faces competition from the likes of Apple Watch and Jawbone -- and now a lawsuit by Jawbone saying Fitbit stole its technology and employees.
But for those who love their Fitbits, the loyalty is undying.
"I love it. The fact that you're seeing a counter or a reminder, is a bit of that kick in the pants to get up and do some exercise," Fitbit user Shane Rogers said.
Analysts say investors have confidence Fitbit will thrive despite troubles. It is one of the few tech companies that started on Wall Street with a profit already on the books and climbing sales. Still, others say the trackers are a fad; so we'll see how far they go.
You can file reports of Fitbit rashes here: www.saferproducts.gov
