Business Opeartions: Equity Funding Jaspreet Kaur Brar 7236144 MGMT 8340 David Knight August 4, 2015 FITBIT IPO Fitness is the most popular company and it is well known for its products of the same name that the company has. Fitbit offers compact, wireless and wearable sensors that track the daily activities of the person in order to promote a healthy lifestyle to the people (CrunchBase, 2015, p1). Fitbit was founded by Eric Friedman and James Park in 2007 and is located in San Francisco, California. On June 17, 2015, fitbit went off public and “FIT” is the trading symbol of the company (MediaWiki, 2015, p2). Reasons to Become Public Corporation: Competition There is a tough competition between the companies making …show more content…
After the IPO, the range of the price was raised from $17 to $19. $20 was the final price which was increased again for an IPO. It gives a Fitbit $4.1 billion valuation. In the mid of march 2015, fitbit has sold over 20.8 million devices since its inception. More than half of the device, 10.9 million were sold in 2014, up from 4.5 million in 2013 and only 3.1 million devices were soli in 2013. The high value of fitbit already surged to more than 6.1 billion and on the first day of trading, forbid stock price gained more than 50% (Lombardi Publishing Corporation, 2015, p3). Money raised by the IPO expected to be used for Fitbit decided to use the money in the expansion of the business in future as well as also to re-invest in the infrastructure of the company. Secondly, fitbit looks to invest in new models. Last, the company will use the raised money in the process of research and development so as to strength the products and line up the services of the company and possible acquisition as well. Popularity Fitbit has turned out to be more popular than expected, which along with raising the price of the deal twice. It also sells more shares than expected. Sales of the company rose from 174% to $175 million last year. (Fortune, August 2015, …show more content…
Competition Wingstop follows the footsteps of a number of other fast casual restaurant companies. They aimed to fly above the fast casual competition as well as ready to spread its wing. Therefore, wingstop decided to go public in order to give the tough competition to QSR chains because of their ability to stand out against fast casual investments. Stock Wingstop became a public corporation in order to list all its common stock on the Nasdaq Global Select Market under the symbol Wing (Jon c, 2015, p3). Attraction The other reason for becoming public corporation is to attract the investors and stakeholders in order to sale its additional shares of the common stock and also to create the awareness among people. Revenue After the IPO, the total revenue of the wingstop was increased to $67.4 million and net income also rose by $9 million. Dollar Objective of Wingstop The IPO price range expected by the Wingstop chain was in between $12 to $14 per share. After the IPO, the range of the price was raised to $19 per share that was about $110.2 million. In the offering, a Dallas based company sold 2.15 million of the 5.8 million