Google parent Alphabet has advanced a bid to buy US wearable technology maker Fitbit, Reuters reported citing sources.
It is uncertain if a deal will materialize and the exact offer could not be learned.
Both companies declined to comment. Fitbit shares jumped 27% on the report, while Alphabet’s stock was up 2% to $1,293.49. Following the news, Fitbit’s market capitalization reached $1.4 billion.
Although, Google already develops smart phones, it has not yet entered the wearable segment.
In July, Fitbit cut its 2019 revenue forecast, which it attributed to disappointing sales of its $160 Versa Lite smartwatch. The cheaper watch lacks some features such music storage.
Fitbit is facing challenges as China’s Huawei and Xiaomi are offering cheaper products. The company’s trackers measure daily steps, calories burned, and heart rate.
Three months ago, Fitbit and government of Singapore signed a contract as part of which Fitbit will provide its services to a health program. The project could reach up to 1 million users, the company said.
Also in August, Fitbit unveiled its newest smartwatch, which includes Amazon’s Alexa, online payments and music storage as some of its features.
Fitbit is scheduled to report third-quarter earnings on November 6 while Alphabet is set to publish its financial report early next month.
In January, Fossil said that it would sell its smartwatch intellectual property to Google for $40 million, but the plans for these assets are unclear.
Reuters reported that Fitbit has been in talks with investment bank Qatalyst Partners about a potential sale.
Shares in Fitbit are trading mostly flat at around $5.65 apiece year-to-date.
