With the hot stock debut of Fitbit, a maker of popular wearable fitness-tracking devices, the spotlight shone on its CEO and cofounder James Park, a 38-year-old Korean-American.
In its first day of trading Thursday on the New York Stock Exchange, the company’s stock surged more than 50 percent to $30.40 a share from its initial price of $20 during regular trading hours.
More than 40 million shares of Fitbit were traded, putting the company on track to rank among the top five stock market debuts of the year by deal size.
The CEO owned 20 million shares going into the initial public offering translating into $600.6 million at the $30 a share price.
Park, a Harvard dropout whose family came to the U.S. when he was 3, set up Fitbit in 2007 with his business partner Eric Friedman, who is now the chief technology officer.
Fitbit CEO James Park (center) rings the opening bell before the company’s initial public offering on the floor of the New York Stock Exchange on Thursday. (Bloomberg)
Prior to that, he worked as a tech expert for financial firms and founded several start-ups, including Wind-Up Labs and Epesi.
He came up with the Fitbit idea after playing video games, struck by the way the Nintendo Wii combined motion sensors and software.
The 8-year-old Fitbit is considered a wearable health tracking pioneer. Its colorful wireless wrist bands and devices track heart rate, calories burned, sleeping patterns and step counts.
The novel ability has seized the attention of health-conscious mobile users, creating a whole new market for related technologies.
Fitbit’s business has had its ups and downs over the past years. The company was forced to recall some tracker models because consumers suffered allergic reactions to the wristbands, while some patent infringement cases with rival firms are still underway.
But the company has continued innovation, pouring resources into research and development and raising awareness among consumers.
The company has sold about 20.5 million units of its devices, with more than half sold last year alone. After years of losing money, its revenue also almost tripled to $745.5 million last year from the previous year.
Despite the successful stock debut last week, challenges are everywhere.
With the market soaring, big companies like Apple and Samsung Electronics have launched new wearable devices to include health-tracking features, while China’s Xiaomi has surged to become the No. 2 player with a number of low-cost, high-quality devices.
But the Fitbit CEO showed confidence amid stiffer competition, naming “focus” as the company’s key competitiveness.
“We think the market is so big that it’s not really about competition. It’s actually about raising consumer awareness,” he said in a recent Forbes interview.
“A key part of our success has been focus. All we do are health and fitness tracking products. We don’t create phones and lightbulbs,” he added, hinting at increased focus on R&D in the future.
By Lee Ji-yoon (jylee@heraldcorp.com)
