As rumored, Fitbit has officially finalized their buyout of Pebble. Though, using the term “buyout” or “purchase” seems a bit misleading. In fact, Pebble sent out an email today declaring that they were shutting down the company. The communication referred to Fitbit deciding to purchase “key assets.” Therefore, counter to the original rumor, Fitbit is not acquiring Pebble. Instead, Pebble closed shop today and Fitbit was first in line to buy any meaningful assets. While a small detail, this means that the financials at Pebble were likely far worst than predicted.
If we had to guess, similar to last summer, Pebble was desperate for more cash. Likely, they once again could not find the money through VC and this time were not able to get another bank loan. Their only option at that point would be to sell or close. Pretty much confirming that line of thinking, in an email from Pebble this morning it states that they “can no longer operate as an independent entity.” This is all pretty astounding for a company that turned down a purchase offer from Citizen for $740 million in early 2015 (not even 2 years ago). Recognizing the immediate need to sell, Pebble most likely could not find a purchaser willing to acquire all assets including debt, therefore the only sound business decision left was to shut down (business school 101: shutting down is always a viable option). Details are emerging on what assets Fitbit is purchasing and what Pebble’s closure means for customers and employees.