Fitbit skyrockets 41% after Google reportedly makes offer to buy company

• Google parent Alphabet has made an offer to buy Fitbit, according to Reuters.
• Shares of Fitbit skyrocketed as much as 41% on the news.
• Buying Fitbit would help Google expand into wearable devices, and help compete against heavy hitters such as Apple and Samsung.
• Watch Fitbit trade live on Markets Insider.

Fitbit skyrocketed as much as 41% Monday after a report that Google is looking to buy the company to add smartwatches to its portfolio.

The surge added roughly $460 million to Fitbit's market capitalization, pushed the company's returns into positive territory year-to-date, and brought the stock to its highest level since March.

Google parent company Alphabet officially made an offer to acquire the wearable device company, Reuters reported Monday, citing people familiar with the matter. The price that Google has offered was not stated, and it's unclear that any negotiations will result in a deal, according to the report.

A deal with Google could give Fitbit a boost, as it has struggled to maintain market share amid growing competition from heavy hitters like Apple, which made up about half of the global smartwatch market in 2018, CNBC reported.

In July, Fitbit lowered its guidance for the year because of weak sales of the Versa Lite, its cheapest smartwatch, sending shares down as much as 20%. Shares went lower again in early October when the company announced it would move manufacturing out of China to avoid US tariffs.

Buying Fitbit would help Google establish itself as a player in the smartwatch market. While Google offers smartphones, it's held off on offering a smartwatch since it scrapped plans to release one in 2016. While it's worked with companies such as LG Electronics on smartwatch software, it doesn't have a physical product in the space, giving Apple and Samsung significant leads in the category.

The news comes after speculation that Fitbit was looking for a buyer. In September, Reuters reported that the company was in talks with investment bank Qatalyst Partners, discussing a potential buyer, and had been encouraged to attract a bid from Alphabet. Shares surged as much as 19% over two days on that report.

Fitbit has climbed roughly 7% year-to-date.