Interactive Investor

Why Fitbug Holdings just rocketed 367%

22nd October 2014 10:58

Lee Wild from interactive investor

Unless you're a keep-fit fanatic, it's unlikely you will have heard of Fitbug Holdings. The AIM-listed company has invented wearable devices that help monitor a wearer's fitness, sleep and calorie consumption. It had gone unnoticed on the junior market for years, but news that US retail giant Target and supermarket chain Sainsbury's will stock its wearables ranges from next month has sent Fitbug shares rocketing almost five-fold.

Getting the devices on the shelves in time for Christmas is a massive coup for the tiny firm. It was worth just £630,000 last night and its shares were trading at 0.375p. On Wednesday they soared as high as 1.75p and the company is now worth over £2.7 million.

And there's every reason to believe its gear will sell well. These devices have become increasingly popular in recent years, and Fitbug is in talks with Tesco, Dixons and PC World about potential sales agreements. Its top-of-the-range Orb product is also competitively-priced, retailing for £49.95 compared with the Nike FuelBand which can sell for as much as £129.

There are no earnings forecasts for Fitbug presently, but the company doubled sales in the first half of 2014 to £914,000. However, investing heavily in its KiQplan digital coaching product, due for launch in November, meant losses swelled to £1.6 million. Fitbug is also fighting an expensive legal battle against rival Fitbit, alleging trademark infringement, unfair competition and unfair business practices. A trial date of 9 February 2015 has been set by the US District Court of Northern California to hear the Company's legal action against Fitbit.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.