OWLT - Why Owlet Stock Plunged 31.3% Today
Shares of baby health stock Owlet (NYSE: OWLT) fell as much as 31.3% in trading early on Monday after the company got a warning letter from the Food and Drug Administration (FDA) implying that the company is improperly marketing products. Shares recovered quickly after their early drop, but were down 23.5% at 2:10 p.m. EDT.
The FDA letter said, in part, that "Owlet's marketing and functionality in the U.S. renders the Smart Sock a medical device requiring premarket clearance or approval from the FDA, and that Owlet has not obtained clearance or approval." The Smart Sock is a device that is attached to a baby's foot that monitors their sleep.
In an investor update, management said that it's working with the FDA on the regulatory status of the product and is going through the approval process for a new medical version of the Smart Sock, which it says is not currently being marketed. But the FDA is saying that its current monitor is marketed as a medical device.
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Why Owlet Stock Plunged 31.3% Today