You know what they say: If the shoe fits, wear it.
Apparently, same goes for the Fitbit.
Shares of the wearable technology company spiked nearly 16% to a new 52-week high on Friday after Fitbit announced it would be acquired by Google parent Alphabet for about $2.1 billion in cash, a move likely to push Alphabet forward in the narrow, yet highly competitive wearables space.
Experts, including CNBC’s Jim Cramer, said it was a smart move for Alphabet given fellow tech colossus Apple’s dominance over the space with its near-ubiquitous Apple Watch.
Here are their reactions:
Jim Cramer, host of CNBC’s “Mad Money,” said this would determine Alphabet’s capacity to compete against Apple:
“A lot of people in the health-care business over there are not that happy. There’s two different health-care units. They haven’t melded them. … Remember what [Apple CEO] Tim Cook says: My legacy will be health care. And … when you talk to watch companies, their businesses are typically down 50% because of Apple. So, this is Alphabet’s first going up against Tim Cook.”
Joanna Stern, a personal technology columnist at The Wall Street Journal, shared a similar take:
“This seems to me [to be] about the Apple Watch. The Apple Watch … has 51% of the market at this point. Google’s Android Wear OS — you guys probably didn’t even know the name of that — they’ve got, like, no market share there. So, you’ve got Fitbit, you acquire Fitbit, you really look at this wearables space for them and you see what happens.”
Dennis Berman, managing director at Lazard, cast the deal as a microcosm of the current market environment:
“Part of this is just, generally speaking, it’s a great time for sellers to get out there, and if there are opportunities to be had, companies would be remiss not to take them if sellers are willing to sell given where valuations are today. So, it’s either sort of get on or get behind.”
