Fitbit trade debacle

Ok … sometimes you just need to confess up to making an error and then working a way out of a hole.

Yesterday with Fitbit due to report earnings, I thought that it may surprise on upside … boy, was I wrong!

With all the published information wrt FIT, I added the following inputs:

  • Apple reported decent growth in Apple Watch sales
  • Almost everybody I know uses a FIT device and does NOT want to buy the more expensive Apple Watch (i offered to buy them for wife and daughter and both declined and chose to stay w/ FIT)
  • I scaned the blogosphere and Stocktwits for any noise – it all came back neutral in RECENT posts

I purchased a total of 300 shares (not much capital intentionally so for a speculative earnings trade)

FIT earnings were good, but the company reduced revenue and margin targets … to sell more cheaper devices (?) … the FIT watch device is NOT selling well.

I am in a hole … I did not sell, I bought a bit more to lower my entry price. Why? User data. The data FIT has is not reproducible. If the current management team cannot figure out how to monetize it, somebody else will … I will keep working (trading) to make a bit of $ of this – a bit of lemonade from really sour lemons.

Key learning: when hunting for noise in blogosphere, retracing steps backward longer in time is worth it.

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