Why Did Fitbit Inc (FIT)’s Stock Plummet Despite a Blowout Q2 Results?

Fitbit Inc (NYSE:FIT) shares went down as much as over 10% in early trading today even though the firm reported blowout figures for its first quarter as a publicly-traded company. After markets closed yesterday, the wearable gadgets maker reported adjusted profit of $0.21 per share on $400 million in revenue for the second quarter, very much above the consensus estimates of $0.08 earnings per share on $319 million in revenue, according to data from Thomson Reuters. It should be noted that the revenue posted by the firm for the just-ended quarter more than tripled from the same quarter last year, an indication that the company’s wearable devices are holding their own against competitors in an increasingly crowded wearables segment.

Not that the firm is having big problems at the moment. Fitbit Inc (NYSE:FIT) reported that it sold 4.5 million devices in the second quarter, a fact that should make investors like John Griffin’s Blue Ridge Capital very happy. Fitbit sold just 1.72 million devices in the same quarter last year. Blue Ridge is the first hedge fund to disclose a stake in the wearables company when it revealed last month that it owned 3.5 million shares of Fitbit, an 8.32% passive stake in the firm.

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