Jawbone is caught in a dispute among its investors that may force the slumping maker of fitness trackers to surrender control of its assets to one of them. But CEO Hosain Rahman has told his employees that he has funding commitments sufficient to save the company.
Investment manager Blackrock, which backed Jawbone last year with $300 million of debt, has been pushing for a sale of the company, according to a source close to the situation. Rahman and other investors are pushing back.
“I believe everyone knows one of our larger constituents has been pushing for us to sell Jawbone,” Rahman wrote in an October 8 email to employees that was obtained by Fortune. “Even as we have a clear path towards funding, they continue to fight against the company and the rest of our shareholders.”
Blackrock (BLK) and Jawbone declined to comment.
Jawbone has been suffering in the market for wearable fitness trackers amid fierce competition from Fitbit, Garmin (GRMN), Apple, and others. Among its recent setbacks, a judge for the U.S. International Trade Commission in August rejected Jawbone’s claim that Fitbit had stolen its trade secrets. In January, Jawbone president Sameer Samat left the company after less than a year on the job.
Amidst all the problems and at the behest of Blackrock, Jawbone hired an investment bank and sought bids for the company. But no significant offers came in, according to Rahman.
“We capitulated, did our best in the running the process and didn’t get anything meaningful that would allow us to maximize value for all of our stakeholders, operate as a unit and see our vision through from this process,” he wrote in the email.
Bloomberg reported last week that Jawbone was planning to hand over all its assets to creditors in advance of a possible sale or liquidation of the company, citing unnamed sources. Rahman said those sources were “either not knowledgeable or not being truthful.”
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In battling against a quick sale or liquidation, Rahman said he had signed term sheets to raise over $150 million and restructure the company. “This final part of the road is going to be bumpy as not everyone is aligned with moving us forward,” he wrote.
Jawbone has long been plagued by execution problems, including the delay of its UP3 fitness bracelet last year. Jawbone said it settled a lawsuit with contract manufacturer Flextronics in 2014 over breach of contract.
Meanwhile, sales at Fitbit (FIT) increased 48% in the first half of 2016 to $1.1 billion, and the company introduced a slew of new models. And Apple (AAPL) has just started selling a second version of Apple Watch with a greater emphasis on fitness features.