Consumer Electronics
Fitbit, Run by One of America's 20 Worst CEOs, Posts Horrible Numbers
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Fitbit Inc. (NYSE: FIT) once against posted numbers that beg the question whether it can remain a viable standalone company. It also adds to concerns about whether CEO James Park is fit to run the company. He was on 24/7 Wall St.’s most recent list of the 20 worst CEOs in America.
In the final quarter of 2017, Fitbit revenue was $571 million, down from $574 million in the same period of 2016. The company had a net loss of $46 million, compared to a loss of $146 million last year. Park commented:
In 2018 we’ll focus on managing down expenses, continuing to expand in the smartwatch category and supporting our engaged global community on their health and fitness journeys.
The comment hints that the company may need to cut more staff.
Shares fell 16% after hours to $4.66. The company had a share price of $17 in September 2016.
24/7 Wall St.’s Park citation from the 20 Worst CEOs in America 2017:
According to many investors, some companies should never become public. These investors generally refer to corporations that do not have business models that can sustain support from shareholders. Fitbit fits that description.
CEO James Park co-founded the company in 2007 after realizing the potential of using sensors in wearable activity trackers.
Fitbit operates in a sector that includes China consumer electronics giant Xiaomi and Apple (NASDAQ: AAPL). Among the mistakes Park has made is to focus on the crowded health-care and fitness segments of the wearables market, which Xiaomi and Apple have taken positions in.
Fitbit’s third-quarter revenue slumped 21.8% to $393 million from $503 million in the same quarter last year. Fitbit also posted a loss of $113 million in the quarter after reporting a profit of $26.1 million in last year’s quarter. Some analysts have downgraded the shares.
Park took Fitbit public and then pushed it in the wrong direction.
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