Fitbit shares close up 10% on diabetes-monitoring partnership in new smartwatch
Fitbit Inc. shares rallied Thursday to close at levels not seen since late January after the fitness-tracker company announced a collaboration with glucose-monitoring device company DexCom Inc. to allow diabetics to monitor their blood sugar through Fitbit’s new smartwatch.
Fitbit FIT, -1.34% shares surged to finish up 9.8% at $6.49, on more than double their 52-week average daily volume. Thursday marked the stock’s highest close since Jan. 27, after which the shares tumbled on disappointing holiday sales and a reduced outlook. Shares reached on intraday high of $6.78 in Thursday trading. Even with the jump, shares are still down 11% for the year while the S&P 500 index SPX, +0.70% has gained 10%.
DexCom DXCM, +1.93% shares, however, closed down 5.2% at $71.23, but are still up 19% for the year.
Under the collaboration, Fitbit plans to make data from DexCom’s continuous glucose monitors available on its first smartwatch offering, the Ionic. Fitbit said they hope to have the feature available in 2018.
In a statement, Fitbit said the collaboration would allow it and Dexcom “to develop and market products to help people better manage their diabetes and get a more complete picture of their overall health with easy-to-use mobile tools.”
“While we see this as an interesting strategic relationship that could help uptake in 2018, key to the stock will be market acceptance of the Ionic amidst a crowded competitive field this holiday season,” said Stifel analyst Jim Duffy in a note Thursday. Duffy has a “hold” rating on Fitbit with a target price of $6.