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Trade Alert: Taking my stupid Fitbit losses

November 8, 2016 by Cody Willard

I should have taken my losses on Fitbit the first time the company disappointed me, which was back when they were trying to price that secondary at a multiple of today’s stock price. Over the last few quarters while I’ve owned this stock that basically went straight down since I bought it, I’ve made excuses for the company’s inability to please Wall Street thinking that the company would eventually become the de facto standard for fitness wearables, an industry that will be growing tremendously for many years to come.

But Fitbit failed to innovate fast enough (or at all?) to move the bar. I thought the company would have leveraged its sizable first move advantage in the fitness wearable industry to have delivered new kinds of wearables that athletes would be putting on their equipment, on their jerseys, on their shoes, on their skin….and data collecting and analysis and applying deep learning to that data…

Instead, we’re looking at company that’s basically being beaten on the top end by Apple and Samsung wearable watches and on the bottom end by silly Chinese-made and/or Brett Favre-peddled knockoffs.

Revenues won’t come close to estimates any time soon. Margins are down. I feel like an idiot for ever having bought this stock. I’m disappointed with Fitbit’s management and how badly they’ve executed, but I’m more disappointed with myself for not having been disciplined enough to take the losses a long time ago.

I’m going to go ahead and move on from my Fitbit long now and lick my wounds. Mea culpa for this one.

 

Related posts:

Latest Positions and a Trade Alert: Locking in more profits
Trade Alert - Here comes the next tech bubble (but for now, two new hedges)
Trade Alert: Locking in more profits on these puts as the markets open
Trade Alert: It's So Easy And Everyday It's Getting Closer
Trade Alert: Being elkish and avoiding stocks with net debt
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Filed Under: Trade Alert

Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

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This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or cryptocurrency or token any other product or service by Cody Willard or any other third party. Furthermore, nothing in this is intended to provide tax, legal, or investment advice and nothing in this should be construed as a recommendation to buy, sell, or hold any investment or security or cryptocurrency or token or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

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