Fitbit [stock] giving me fits

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valleyrock
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Fitbit [stock] giving me fits

Post by valleyrock » Sun Nov 17, 2019 4:55 am

I know, buying individual stocks is foolish, but this one worked out, it seems.

Alphabet has a deal to purchase Fitbit at $7.35 per share, cash, to go through in 2020 sometime. This price nets me a profit on my shares, but I haven't sold, wanting to defer the capital gains.

Now the stock is at $6.80 per share. Is that an indicator of a problem with the sale? Is it ok to wait this out? This decline is eating into my gains, substantially.
Last edited by Flyer24 on Sun Nov 17, 2019 7:01 pm, edited 1 time in total.
Reason: Title clarity

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RickBoglehead
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Re: Fitbit giving me fits

Post by RickBoglehead » Sun Nov 17, 2019 5:35 am

It is an indicator of something, isn't it?

You should research the chances of the deal succeeding or failing, as you figured you would someday when you bought a stock that someone was very likely to acquire.
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Re: Fitbit giving me fits

Post by z3r0c00l » Sun Nov 17, 2019 7:02 am

The stock was on its way to zero so this is, imho, the last chance to cash out on a not so great investment, and a lucky one at that. As a shareholder in Google I think the purchase is a waste of money and they are running out of ideas so should probably just return the extra cash to us in dividends or buybacks. I say all this because a company like Apple can, on a whim, destroy their business on the high end, and cheaper no-name companies in China can destroy them on the cheap end. GoPro similarly vulnerable.

MathIsMyWayr
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Re: Fitbit giving me fits

Post by MathIsMyWayr » Sun Nov 17, 2019 8:29 am

Most of small or portable gadgets have been integrated into smart phones over the last couple of decades. Cellular phones, am/fm radios, music players, cameras, gps, address books, memo pads. alarm clocks, watches, stop watches, ... Anything which may be integrated into smart phones has no long term future as a stand alone device.

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Wiggums
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Re: Fitbit giving me fits

Post by Wiggums » Sun Nov 17, 2019 8:40 am

The Fitbit quarterly earnings continue to go down with the last qtr being negative. The Google acquisition is the best thing that happen to you. Time to sell in my opinion. Fitbit stock was $40/share just a few years ago. Been a downhill slide since.

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nisiprius
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Re: Fitbit giving me fits

Post by nisiprius » Sun Nov 17, 2019 8:47 am

valleyrock wrote:
Sun Nov 17, 2019 4:55 am
...I know, buying individual stocks is foolish...
According to the the Bogleheads investment philosophy it is foolish.
...but this one worked out, it seems...
It seems to me that it hasn't worked out for you. Not for you. Not yet. Not until you actually sell and realize your profit.
Alphabet has a deal to purchase Fitbit at $7.35 per share, cash, to go through in 2020 sometime.
Cool.
This price nets me a profit on my shares...
No, you mean "if I sold at that price, it would net me a profit on my shares.
...but I haven't sold, wanting to defer the capital gains.
Then you haven't made a profit yet, and it hasn't "worked out" yet.
Now the stock is at $6.80 per share. Is that an indicator of a problem with the sale? Is it ok to wait this out? This decline is eating into my gains, substantially.
You haven't made any gains yet.

I can't answer any of these questions, but these are questions you need to ask yourself and answer for yourself.
  • What did I pay for the stock?
  • Could I sell at a profit at $6.80/share?
  • If the stock price happens to drop a bit tomorrow, could I still sell at a profit?
  • Do I want to make a profit now, or take a risk on what the price will turn out to be "in 2020?"
  • What do I know about the deal that the market doesn't know?
  • Am I buying this as a speculation, based on expectation of a deal, or as an investment, as in Warren Buffett's "our favorite holding period is forever?"
  • Do I actually expect to make money on every short-term stock trade? If I can't say "win some, lose some," "easy come, easy go," if the idea of losing money on a single individual stock trade really bothers me, should I doing them?
For the record, here's how $10,000 invested in Fitbit (blue) would have "grown," compared to one in the most boring possible stock index fund investment, VTI (orange). (Yes, I see that appetizing upward hook at the right end of the blue curve). There isn't any answer in this chart, either, but, again, it's definitely something that should be in your mind, if it isn't already.

Image
Last edited by nisiprius on Sun Nov 17, 2019 10:05 am, edited 2 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Stinky
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Re: Fitbit giving me fits

Post by Stinky » Sun Nov 17, 2019 10:03 am

valleyrock wrote:
Sun Nov 17, 2019 4:55 am
I haven't sold, wanting to defer the capital gains.

Now the stock is at $6.80 per share. Is that an indicator of a problem with the sale?
Is there a particular reason to "defer the capital gains"? It sounds like just a one year deferral, from 2019 into 2020. Is that one-year deferral important to you?

If it were me, I would take a "bird in hand" right now and sell.
It's a GREAT day to be alive - Travis Tritt

retired@50
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Re: Fitbit giving me fits

Post by retired@50 » Sun Nov 17, 2019 10:36 am

Stinky wrote:
Sun Nov 17, 2019 10:03 am
valleyrock wrote:
Sun Nov 17, 2019 4:55 am
I haven't sold, wanting to defer the capital gains.

Now the stock is at $6.80 per share. Is that an indicator of a problem with the sale?
Is there a particular reason to "defer the capital gains"? It sounds like just a one year deferral, from 2019 into 2020. Is that one-year deferral important to you?

If it were me, I would take a "bird in hand" right now and sell.
+1
If it's giving you "fits" as the title states... Dump the shares and get some decent rest... Life is too short to get consumed in this kind of avoidable drama.

Regards,

H-Town
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Re: Fitbit giving me fits

Post by H-Town » Sun Nov 17, 2019 10:44 am

valleyrock wrote:
Sun Nov 17, 2019 4:55 am
I know, buying individual stocks is foolish, but this one worked out, it seems.

Alphabet has a deal to purchase Fitbit at $7.35 per share, cash, to go through in 2020 sometime. This price nets me a profit on my shares, but I haven't sold, wanting to defer the capital gains.

Now the stock is at $6.80 per share. Is that an indicator of a problem with the sale? Is it ok to wait this out? This decline is eating into my gains, substantially.
Never count your money when you’re still at the table. You never have that gain. Either you keep playing with the cards you’re dealt, or you walk away from the table.

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1789
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Re: Fitbit giving me fits

Post by 1789 » Sun Nov 17, 2019 4:55 pm

I would just recommend you to get rid of it asap. There is some excitement going on for google news, once that passes the reality weights in. It always happens that way.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

Trader Joe
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Re: Fitbit giving me fits

Post by Trader Joe » Sun Nov 17, 2019 5:04 pm

valleyrock wrote:
Sun Nov 17, 2019 4:55 am
I know, buying individual stocks is foolish, but this one worked out, it seems.

Alphabet has a deal to purchase Fitbit at $7.35 per share, cash, to go through in 2020 sometime. This price nets me a profit on my shares, but I haven't sold, wanting to defer the capital gains.

Now the stock is at $6.80 per share. Is that an indicator of a problem with the sale? Is it ok to wait this out? This decline is eating into my gains, substantially.
To answer your question, no.

BTW, I avoid investing in anything other than VFIAX or VTSAX and I am very happy with my results.

Topic Author
valleyrock
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Re: Fitbit [stock] giving me fits

Post by valleyrock » Fri Nov 29, 2019 9:21 pm

I want to thank those who responded to my query/quandary over Fitbit. Indeed, no gains exist until it's sold. It's has been an interesting psychological ride, to see oneself obsess, as it were, frequently checking a stock's price. Buying on intuition, being proven correct at first, then moving to having been really wrong, up and down and back and forth, until finally getting through it without a loss, with a bit of a gain (if it's sold under current conditions, of course). I don't plan on doing this again anytime soon, and, in fact, am in the process of trying to get my financial house in order for the short, intermediate, and long term, these time frames reflecting future milestones.

The reason to wait until 2020 to sell is that my 2019 income will affect the Expected Family Contribution for my kid who will start college year after next (if I have the timing correct). That's a big short term milestone. The thing is, I haven't gone online to run a check on this EPC value, which comes from doing the FASFA form, so I don't really know how the probable extra gain will affect the EPC. To address such shortcomings in my financial approach, I'm looking at investing in a fee only financial advisor (as well as other expertise, as necessary, such as a tax accountant, etc.)

Actually, I've been working hard to build a team to work on 💪 these things in a comprehensive way, to include long term care, estate planning, insurance, and the like. Maybe it's naive, but I'm hoping to find someone who can ride herd on getting a lot of this done for me, for a fee, of course. We'll see.

As for Fitbit, I invested long after its peak stock price, because they have the best smartwatch for the price. Their watches work on both Android and Apple devices, go for days without needing charging, and aren't hulks like most of the competition. Much of the world runs on Android, despite Apple's dominance. So I think Google has made a good investment. The price of Fitbit stock has dropped a little recently seemingly because some people are making noises about Google getting Fitbit's data on heart rates, etc. But, hey, most people don't use their real names when they sign up for that stuff! Or do they? And melding smartwatch data with medical care and insurance is a good idea for reducing medical care expenses, if done right.

GoldenFinch
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Re: Fitbit [stock] giving me fits

Post by GoldenFinch » Fri Nov 29, 2019 9:38 pm

When another Boglehead was trying to dump Fitbit I penned the following:

How to say goodbye - An Ode to Fitbit

Fitbit oh Fitbit, I thought you would grow
But you have let me down, let me down low
I was hoping for riches, though you promised me none
Instead I got losses, which aren’t any fun
I’m a Boglehead now, and they say you must go
Will I ever miss you? I have yet to know
I’m sure if I sell you, you will shoot straight up
But I can’t time the market, so I will give up


I hope this helps. :happy

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HomerJ
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Re: Fitbit [stock] giving me fits

Post by HomerJ » Fri Nov 29, 2019 9:47 pm

valleyrock wrote:
Fri Nov 29, 2019 9:21 pm
As for Fitbit, I invested long after its peak stock price, because they have the best smartwatch for the price. Their watches work on both Android and Apple devices, go for days without needing charging, and aren't hulks like most of the competition. Much of the world runs on Android, despite Apple's dominance. So I think Google has made a good investment.
Garmin makes better smartwatches at that price point. And Garmin stock is going up, not crashing 90% like FitBit.
The J stands for Jay

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valleyrock
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Re: Fitbit [stock] giving me fits

Post by valleyrock » Fri Nov 29, 2019 11:55 pm

Garmin makes better smartwatches at that price point. And Garmin stock is going up, not crashing 90% like FitBit.
I find the Garmins to be too large...as with the Fossil and other smartwatches besides Apple. Clunkers. And Garmins are for the work out set, whereas the Fitbits are more versatile and great for their smartwatch features alone. Fitbit bought Pebble and got the chops on smaller watches with great battery life. I think they blew it by not advertising well, and placing ads with huge digits instead of the many analog watch faces to easily switch to.

Crashing is a matter of perspective. If you bought it at $4, you made out. At $40, misery.

But what do I know? I foolishly bought an individual stock, ignoring Bill Bernstein's admonition that the other people across the table always know more than I do about individual stocks.

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