The company now expects its fourth quarter revenue to fall 18%-20% annually, missing its prior guidance for 4% growth and representing its first year-over-year decline since its IPO. On the bottom line, it expects a non-GAAP net loss of $0.51-$0.56 per share, compared to its prior guidance for a profit of $0.14-$0.18 per share.

But investors seem to think that the stock could continue falling — over 30% of its outstanding shares were still being shorted as of Dec. 27. Let’s take a closer look at Fitbit’s headwinds and tailwinds to see if those bearish bets are justified. The bears believe that since fitness trackers are cheap to manufacture, Fitbit’s core market will be commoditized and its brand will lose its premium appeal.