Fitbit will get sued in advance of its IPO

Receiving sued just before you want to offer stock on Wall Road is never ever a very good indication. We will shortly discover out if it has an affect on the first community supplying strategies of Fitbit, the sector chief in health and fitness tracking wearable technological innovation.

One particular of Fitbit’s essential rivals, Jawbone, submitted a lawsuit against Fitbit in California earlier this 7 days. Jawbone promises that Fitbit poached workers and stole the company’s trade tricks and mental property.

Jawbone, which helps make the Up line of fitness trackers, is 1 of numerous businesses trying to gain share in the increasingly crowded wearable marketplace.

In addition to Fitbit and Jawbone, the companies contend with considerably more substantial tech firms like Apple ( AAPL , Tech30 ) , Google ( GOOGL , Tech30 ) and Samsung ( SSNLF ) as effectively as GPS maker Garmin ( GRMN ) and athletic clothing corporations Beneath Armour ( UA ) and Adidas ( ADDDF ) .

Fitbit states in its IPO filing with the SEC that it has a “top placement in the connected well being and fitness unit market.” It cites figures from study organization NPD that demonstrates Fitibt experienced a 68% share of the physical fitness action tracker industry in the U.S. final year.

President Obama has even been spotted donning a Fitibit Surge smartwatch many instances this calendar year — at a higher education basketball recreation, a conference with Ireland’s Primary Minister at the White Residence, and even in an interview with The Wall Avenue Journal.

What is his heart fee? President Obama had a Fitibt on whilst seeing his niece’s university basketball crew — Princeton — in the NCAA event in March.

In its lawsuit, Jawbone argues that Fitbit began “systematically plundering” Jawbone workers before this 12 months in an try to confirm to prospective buyers that it can draw in skilled expertise and bolster its in-home engineering.

Jawbone says Fitibit approached thirty% of its workforce and that at the very least 5 staff remaining Jawbone to function for Fitbit — bringing together trade strategies and enterprise strategies with them.

Jawbone estimates an unnamed Fitbit recruiter as expressing that it was “Fitbit’s objective to decimate Jawbone.”

Fitbit stated in a statement that it “has no need to have to get details from Jawbone or any other firm.” The organization extra that it is “unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously protect in opposition to these allegations.”

And it could be challenging for Jawbone to confirm that Fitibit all of a unexpected made a decision it necessary to hire Jawbone workers en masse to keep on leading of the market.

Fitibit documented income of $ 745 million in 2014 — an enhance of a hundred seventy five%. The company was also worthwhile. And in the 1st quarter of this calendar year, sales a lot more than tripled while income soared as effectively.