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Fitbit CEO reveals he’s transforming the mission and purpose of the company

Fitbit CEO reveals he’s transforming the mission & purpose of the company
Fitbit CEO reveals he’s transforming the mission & purpose of the company

Fitbit CEO James Park reminded investors that his product is very different from the Apple watch.

"We are a fitness social network that is coupled to hardware, and we are on the cusp of transitioning the mission and purpose of our company from a consumer electronics company to a digital healthcare company," Park told "Mad Money" host Jim Cramer on Thursday.

Fitbit's focus is very different from Apple, Park said. The company aims to encourage users to become healthier and more active, whether it is through the use of its devices, software or services. Park said the social aspect of the product drives Fitbit's growth.

James Park
Mark Neuling | CNBC

Fitbit's stock has had a rough ride this year, falling more than 50 percent. It was a routine that Cramer could count on like clockwork. He noted that every quarter, Fitbit would report incredible sales and earnings, but then provide disappointing guidance that would cause the stock to fall.

However, the stock has gained traction lately, up 15 percent since June. Fitbit also finally delivered in-line guidance in its last quarter. Park told Cramer that he was baffled at Wall Street's response to new products released.

"Fitbit Charge 2 is the No. 1 best-selling fitness tracker on Amazon. You know, we launched two other great products earlier this year – Alta and Blaze – and if you remember, the investor reaction to Blaze was … I couldn't understand it at all. Even today, Blaze is the No. 1 selling smart watch on Amazon," he said.

Moving forward, Cramer thinks the "big money" in Fitbit is with digital health plans. According to Fitbit, a third party study announced this week that for employers, the average cost of health care for employees that opted into a Fitbit wellness plan was 25 percent less. That translated into approximately $1,300 in savings versus someone who did not opt in.

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