I was a bit sceptical regarding Fitbug's initial rise, because in my eyes any company that has rocketed thousands of percent logically has more downside potential than upside potential, as this is where the familiar trading range exists, which in turn drags strong price support lines lower.
However, I need to eat my hat, because Fitbug just seems to keep rising (N.B. I do hold shares in Fitbug, so I obviously have an upside bias in my view point).
The reasons why this company seems to be doing so well I think can be condensed down into a few points and these points below will only just scrape the surface of the company:
1. Fitbug has official contracts with Samsung and retails in Apple Online Stores Worldwide.
2. Fitbug has broken into the US, within stores such as: Walmart, Kmart, Target and Frys.
3. Fitbug has contracts for selling in Tesco, Sainsburys, Argos, Dixons and numerous other stores in the UK.
4. Fitbug has links with the huge insurer Prudential and other vitality players to offer their products.
5. Fitbug retails online through many outlets, but with the most notable one being Amazon, where the FItbug Orb has an average rating of four and a half stars (the Fitbit Flex only has four stars).
6. The lawsuit against Fitbit from Fitbug for trademark infringement looks as though it's likely to settle outside of court (statistically more than two thirds of civil law suits do), which could potentially provide Fitbug with restrictions on the sale of Fitbit products, but also provide an enormous sum of monetary compensation (at least $10,000,000, as seen on page 12, point number fifty-three - download.html. Also, if this case is settled out of court, it will likely happen significantly sooner than the expected hearing date in February (12th December onwards).
More details regarding the timing of this case can be found here:
https://cases.justia.com/federal/district-courts/california/candce/3:2013cv01418/264770/31/0.pdf?ts=1387033495
7. The Fitbug Orb is either sold out or is selling out very quickly in the UK retails stores for certain - I know this personally, because the large outlets I went into had out of stock signs above the item in question. In fact, the only reliably stocked place you can acquire one is from Amazon at present.
8. Christmas revenue will - in my opinion of course - be huge, because Fitbug's products retail for around 30-40% less than those of Fitbit, which is a hefty saving in two products that are in raw terms very similar, if not identical.
9. Tech companies aren't valued (and shouldn't be valued) purely from a numerical stand point, meaning that the current market capitalisation of only £25 million is, by the standards of other booming tech companies, a bit low, in my opinion. This is for any number of reasons pertaining to branding, patents, goodwill, etc. Let us not forget that WhatsApp sold for $22 billion to Facebook and that had never even made a profit.
I think that the ultimate reason for the success of Fitbug so far, is because the company has been breaking down the high walls of many popular consumer outlets to sell their products and while good products tend to sell themselves, these two factors combined (great products and excellent retailing of said products) look as though they will continue to push the company much higher in both the short and long term future.
Extra Reading:
Valuing Fitbug:
http://themaskedstocktrader.blogspot.co.uk/2014/11/valuing-fitbug.html
All the best,
The Masked Stock Trader
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