Google buys Fitbit for $2.1B, stepping back into wearables

Wearable tech by Fitbit is shown during the 2014 International CES at the Las Vegas Convention Center in Las Vegas, Nevada on January 8, 2014. Google has agreed to buy Fitbit in a move giving the US tech giant an entry into the wearable technology space, the two companies announced on November 1, 2019. (AFP)
Updated 01 November 2019

Google buys Fitbit for $2.1B, stepping back into wearables

  • “Google doesn’t want to be left out of the party,” said analyst Daniel Ives of Wedbush Securities. “If you look at what Apple has done with wearables, it a missing piece of the puzzle for Google.”

SAN JOSE: Fitbit is being acquired by Google’s parent company for about $2.1 billion, a deal that enables the Internet company to step back into the hotly contested market for smartwatches and health and fitness trackers.
Fitbit is a pioneer in wearable technology, but it’s been shredded by that competition. The company’s market capitalization soared to just under $10 billion after becoming a public company in 2015. Its value this week is well below $2 billion.
Google has struggled to stake out a presence in the wearables market. Its years-earlier foray into smartwatches that used its Android Wear software has largely faded. This deal could give it more of an opportunity to compete with the Apple Watch.
“Google doesn’t want to be left out of the party,” said analyst Daniel Ives of Wedbush Securities. “If you look at what Apple has done with wearables, it a missing piece of the puzzle for Google.”
When rumors of a potential buyout by Google surfaced earlier this week, Fitbit shares soared almost 30%. The stock jumped another 17% at the opening bell Friday.
Alphabet said it will pay $7.35 per share for the company, which were trading at $7.20 each after the deal was announced.
“With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone,” Fitbit co-founder and CEO James Park said in a statement.
Fitbit has 28 million active users worldwide and has sold more than 100 million devices. The company said that its privacy and security guidelines won’t change and that it will continue to be transparent about the data it collects and why. Fitbit said that it never sells personal information and that its health and wellness data will not be used for the advertisements that drive Google’s main business.
Fitbit’s privacy policy says data it collects include a user’s date of birth, gender, height, weight, and for some users it also stores logs tracking their food and water intake, as well as sleep and female health patterns.
The deal is expected to close next year if approved by regulators and Fitbit shareholders.
Ives said it will likely face additional scrutiny at a time when federal antitrust enforcers and Congress have launched broad investigations into the market dominance of Google and other major tech companies.
“This is definitely going to get a very close look from regulators,” he said.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 19 min 45 sec ago

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple
  • More than top five oil companies combined

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco had earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading:

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