Biz Break: Fitbit investors don’t like fit of Vector acquisition

Biz Break: Fitbit investors don’t like fit of Vector acquisition

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Top of the Order:  

If the Watch Fits: Fitbit’s acquisitions of smartwatch rivals suggest that it cares more about how those companies’ software and design teams would fit with the San Francisco company than about the products they actually make.

This seems to be Fitbit’s M.O. It was on display in December when Fitbit acquired smartwatch maker Pebble for a reported $40 million. At that time, Pebble said it was closing up shop and wouldn’t make any more of its watches as Fitbit incorporated Pebble’s software and other assets into its operations. And it appeared again Tuesday as Fitibit acquired another privately held smartwatch maker, Vector.

Vector itself was barely a year old, but had made a name for itself with what were called “affordable luxury” watches. Basically, these were watches intended to look more expensive than they really were, but which also came with some advanced bells and whistles. These included an e-ink LCD screen and a battery that could stay charged for 30 days. Vector also sought to stand out in the smartwatch market by using an operating system that the company created itself.

And, maybe that’s something Fitbit will use in whatever versions of the Blaze and other wearables it has planned for down the road.

Right now, investors aren’t sold on Fitbit’s latest acquisition. They drove the company’s stock price down by almost 6 percent Tuesday to close at $7.33.

That’s not a good way to start the year. But it is par for the course for Fitbit, as the company’s shares have fallen more than 61 percent from a year ago. With its quarterly earnings report coming up in a few weeks, Fitbit will soon see if those results give investors some faith in where the company is headed.

Middle Innings:

Tweeting on Trial?: Twitter spent a good part of 2016 addressing online bullying and abuse. And the company always seemed to be trying to do something, anything, to help its users fight back against potentially hateful tweeting.

But, whatever Twitter has done, it’s not enough for the families of three Americans killed in terrorist attacks in 2015 and 2016 in France and Belgium. Those families have filed suit against Twitter, alleging that the company has, basically, given the terrorist group ISIS a free platform online to spread its message and gather recruits.

The lawsuit claims that Twitter violated the Anti-Terrorism Act, and the plaintiffs area seeking “compensatory damages in amounts to be determined at trial.” The lawsuit was filed Jan. 8 in the Southern District of New York.

Cuts at the Cart: Instacart, the San Francisco-based online grocery delivery company, might not be getting enough orders.

Recode reported that Instacart is cutting the pay for some of its employees in four cities — Seattle, Atlanta, Chicago and Portland, Oregon — less than a year after the company instituted another broad pay cut. The new cuts are said to range between 11 percent and 19 percent for workers who shop for and deliver grocery orders, and those who just deliver groceries are seeing pay cuts of between 6 percent and 21 percent.

The new pay cuts also come as the company has been making changes to its overall pay structure, including removing and then reinstating the option for customers to give tips to delivery workers.

Bottom of the Lineup:

Here’s a look at how some leading Silicon Valley stocks did Tuesday.

Movin’ on Up: Gains came from Gigamon, Chegg, Wageworks, Coupa Software and Sanmina.

In the Red: Decliners included Abaxis, Impax Laboratories, Zeltiq Aesthetics and VeriFone Systems.

The tech-focused Nasdaq Composite Index rose 0.4 percent to 5,551.82.

The blue chip Dow Jones Industrial Average slipped by 0.2 percent to 19,855.53.

And the broad-based Standard & Poor’s 500 Index flatlined to finish the day at 2,268.90.

Quote of the Day: “I still feel like I had to do it.” — Dylann Roof, who was sentenced to death Tuesday for killing nine black churchgoers in Charleston, S.C. in June 2015.

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Published at Tue, 10 Jan 2017 23:33:09 +0000