UNFIT

 Today I finally did it. I got out of my investment in Fitbit. It turned out okay for the most part returning about 45% eventually, but I have to admit it was nothing like how I thought it would play out. 

Don't get me wrong. I am not the one to complain about a 45% return on investment, but I had bigger plans for Fitbit. The initial thesis made a bunch on assumptions. 

- The fitness market would eventually see the value of Fitbit

- The first mover advantage will make Fitbit lead in innovation

- The pie of the fitness market is growing and hence Fitbit will grow like a weed

- Fitness was a market that big players could not avoid and Fitbit will eventually get bought out

Eventually I was right partially on just one aspect of the thesis and that was that a bigger player will buy them out. But if any one of the other line items had played out, that buyout would have looked very different. At the end it closed out with a whimper. I am glad I had an exit because for a while there in the third quarter of 2019 things were looking very bleak on all fronts. 

Fitbit failed to capture the imagination, the transition and the execution of the market which it pioneered. And for all the understated tone of the CEO, that I admired, it turned out that they were very poor at judging the market and positioning themselves well. It did not help that Apple came in and sat right in the middle of their playground. 

Google's purchase of Fitbit was one of exit strategies that I had gamed. But when I initially started building a position I was expecting the buyout to happen at around 3.5-4 billion. By the time the offer came, Fitbit had managed to erode so much of its market advantage that a 2.2 Billion is also they could muster. 

I still remember the day I heard there was an offer from GOOG. My heart fluttered. I had setup call options a month back because I was suspecting something based on price action, but it all turned out for knot because the buyout price sat exactly at breakeven for my options. 

Oh well! Can't complain. As a matter of fact I consider myself lucky enough to have a respectable exit based on how things played out.

You hit some out of the park and get some strikes. And then there are the ones that just rolled on the ground just enough to get you to the base.