After the news had broken out that Google's parent company Alphabet had made an offer to acquire health watchmaker Fitbit, the company saw its stock surge by more than 18 percent.
The sudden influx of purchases resulted in the temporary freeze of the stock's trading.
According to a report published on Monday citing sources familiar with the matter, Alphabet had already made an offer to acquire Fitbit.
The exact amount or the details of the offer are still not yet known.
After the stock resumed trading, FitBit ended the trading day with an increase of 30.5 percent.
This boosted the company's market valuation by more than $330 million to a total of around $1.5 billion. Since the start of the year, FitBit's shares are now up by more than 12 percent.
If Alphabet does manage to acquire Fitbit, the company would become a major player in the fitness tracking sector. This would place it squarely against its major competitor Apple, which had just released the latest version of its popular Apple Watch wearable device.
Alphabet, through Google, already has its hands in the wearable space, but it only produces operating systems that it licenses to other companies. Google currently does not make its smartwatch, but if Fitbit accepts its offer, it will automatically have a tried and tested platform to expand its involvement in the sector.
Earlier this month, Google had mentioned that part of its hardware strategy would be to allow customers to access its services wherever and on whatever type of Google device they were using. Acquiring Fitbit could very well play into the company's overall strategy, allowing it to offer a product that is comparable to what Apple is currently offering.
Google's expansion into the health and fitness products space was foreshadowed by its recent hiring of former Geisinger Health CEO David Feinberg. With its new hire and planned acquisition, Google is setting itself up to enter the highly lucrative health and fitness space in a very big way.
Fitbit, as a brand, will also stand to greatly benefit from the acquisition as it has struggled to compete with Apple. In 2018, Apple had cornered nearly half of the global smartwatch market. This essentially pushed other competitors aside, significantly lowering down their sales numbers.
In its latest earnings report, Fitbit had downgraded its revenue forecast for the year. The company had stated that its decision was based on weaker-than-expected sales due to increased competition.
