Shares of fitness smartwatch manufacturer Fitbit have dropped below $20, trading below the company's initial public offering price for the first time and exhibiting the pervading reservations of investors as the company struggles to compete against prominent tech companies like Apple in the smartwatch arena, according to America's Markets.
As of Monday trading, shares of the wearable health device went down 12 percent, trading at an all-time low of $18.85 per share. The decline comes as the company is still reeling from a slump in stock prices last week when the Fitbit's shares dropped 18 percent during last Tuesday's trading.
Analysts state that a big reason for the early 2016 slump in the company's shares is partly due to the announcement of the Fitbit Blaze, a smartwatch that is set to go on sale for $199.00. The company's new wearable includes heart-rate tracking, support or text notifications, and connected GPS, reports ZACKS.
Though the Blaze far outdoes its rival, the Apple Watch, in a number of areas such as battery life, the device's relatively high price point and the absence of third-party apps for Fitbit's smartwatch severely cripples its profitability.
The company was also hit with a class-action lawsuit last week, which claims that the heart-rate monitors in Fitbit watches, one of the primary features of the company's devices, are inaccurate. Though the company has denied the allegations, its stocks still fell about 27 percent over the week, according to Market Watch.
With the first weeks of the new year taking its toll on the smartwatch company, 2016 is looking to be a year of challenges for Fitbit.
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