After market close on Wednesday, Fitbit (FIT) reported earnings that destroyed Wall Street estimates. Q2 2015 revenue of $400 million not only topped the $320 million analyst consensus, but was nearly fourfold what the fitness tracking device maker had generated in Q2 2014. Adjusted earnings per share were $0.21, compared to estimates of $0.07. International revenue climbed around 250% year-over-year.
And then the stock began to… utterly tank, ending yesterday down 13.63% from Wednesday’s closing price.
Yes, Fitbit is still very highly-valued with a $9.19 billion market cap and a $44.60 per share stock price that more than doubles its $20 IPO price, but why did traders sell off a company that, on paper, seemed to have done everything right?
One explanation could be that there was a percentage point miss on gross margin, but the more troubling rationale came from CNBC’s Jim Cramer. He put the blame on Fitbit CEO James Park’s performance during the earnings call and, in particular, Park’s refusal to get specific on such things as new product launches. “This is one where the numbers were superb, but when we speak with the CEO, you can’t run your company like a private company when you’re public,” Cramer said.
Given that Fitbit’s quantitative performance should not have caused the stock price dive, I’ll accept Cramer’s qualitative reasoning. And it is the sort of thing that will make it even less likely that big, VC-backed tech companies go public until they are virtually forced to do so.
I’ve given unicorn CEOs grief in the past for not taking their companies public, echoing venture capitalist Bill Gurley’s analogy about how star college athletes don’t shy away from the pros because of added scrutiny. But the Fitbit experience gives credence to the paranoia, as Park appears to have done everything right except for exhibiting the proper bedside manner with entitled stock analysts.
[fortune-brightcove videoid=4354560068001]
Yes, Park will need to change up his phone etiquette for the sake of his company and its shareholders. But if Wall Street would like more of these high-growth startups to go public, perhaps it should also take a good, hard look in the mirror.
Get Term Sheet, our daily newsletter on deals and deal-makers.
