Alphabet to Acquire Fitbit: Is It a Good Move?

Smartwatches look to be the next battleground for tech giants Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) and Apple (NASDAQ: AAPL). On Friday, Alphabet announced that it would be acquiring smartwatch maker Fitbit (NYSE: FIT) in a deal worth $2.1 billion.  

Fitbit has been a stock in trouble this year as the smartwatch maker has had a tough time competing against Apple. Outside of the original Versa, many of Fitbit's products simply haven't performed as well as the company would have liked, and with losses continuing to mount, investors have opted for better growth stocks to invest in. Its declining share price has made it a much more attractive buy for an acquiring company, giving Alphabet a much better deal than if it had tried to make a bid for Fitbit earlier in the year before the stock had entered its tailspin.

Earlier this year, Alphabet subsidiary Google had announced that it would be purchasing intellectual property from another smartwatch company, Fossil, for $40 million. By adding a bigger player in the industry like Fitbit into the fold, Google adds to its collection of hardware that can be incorporated into its ecosystem.

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Source Fool.com