Fitbit is having a rough start to the year
Wearable activity tracker Fitbit is being accused by its rival Jawbone of stealing trade secrets, Bloomberg reports.
The two companies have been caught up in legal battles since May 2015, when Jawbone sued Fitbit for stealing employees and critical proprietary information.
The Justice Department and Department of Homeland Security have been conducting a grand jury probe of Fitbit for more than five months, according to Jawbone's Feb. 1 filing in San Francisco state court.
"The evidence developed to date in this litigation confirms a conspiracy by Fitbit and the individual defendants to steal Jawbone's coveted trade secrets and to use them to enhance Fitbit's position in the marketplace, in clear violation of California law," Jawbone said in last week's filing as reported by Bloomberg.
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Fitbit is trying to get the suit dismissed, claiming that there is no evidence that the files Jawbone says were taken by its ex-employees were ever downloaded to or accessed on Fitbit's systems. There is another hearing set for Feb. 15.
Shares of Fitbit had a rough 2016, tumbling by 75% amid an increasingly competitive market for wearable devices. In November, the company slashed its earnings-per-share guidance for the holiday quarter to just a quarter of what analysts had been expecting.
The company has also suffered a tough start to this year, after reporting fourth-quarter results on January 30 that were well below previous estimates, in addition to slashing its guidance for the vital holiday quarter. FitBit said it sold 6.5 million devices in the fourth quarter, and that revenue would come in at $572 million to $580 million, well below its previous guidance range of $725 million to $750 million.
STOCK PRICE FOR FIT
Fitbit is down 18% year-to-date, but up 0.8% at $6 on Tuesday morning.
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