- Company Name
- Fitbit, Inc.
- Stock Symbol
- Class Period
- August 2, 2016 to January 30, 2017
- Motion Deadline
- December 31, 2018
- Northern District of California
The complaint charges Fitbit and certain of its officers with violations of the Securities Exchange Act of 1934. Fitbit is a technology company focused on health-related devices, including wearable devices such as health and fitness trackers and smartwatches, that enable users to view data about their daily activity, exercise and sleep in real time.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations and prospects. Specifically, the complaint alleges that defendants failed to disclose that the Company was struggling to transition its mission and differentiate itself from Apple Inc. and other competitors; that the Company was experiencing increased competition, which had a negative impact on demand and sell-through for the Company’s existing and new products; and that the Company’s sales and financial results were weakening and growth was slowing, such that the Company’s financial guidance during the Class Period was overstated. As a result of these false statements and/or omissions, Fitbit securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of nearly $17 per share.
On November 2, 2016, Fitbit issued a press release announcing its third quarter 2016 financial results. In the press release, Fitbit disclosed that it was lowering its full year 2016 revenue guidance to “between $2.320 billion and $2.345 billion” from its previous guidance of “$2.5 to $2.6 billion.” On this news, the price of Fitbit shares fell $4.30 per share, or nearly 40%, to close at $8.51 per share on November 3, 2016.
Then, on January 30, 2017, Fitbit issued a press release announcing its preliminary fourth quarter 2016 financial results. In the press release, Fitbit disclosed that it expected fourth quarter 2016 revenue to be in the range of $572 million to $580 million, rather than its previous guidance of $725 million to $750 million. Fitbit also disclosed expected annual revenue growth of approximately 17%, rather than its previous forecast of 25% to 26%. On this news, the price of Fitbit shares fell $1.15 per share, or 16%, to close at $6.06 per share on January 30, 2017.