Peloton Interactive, Inc. is a New York-based exercise equipment and media company. Its main products are Internet-connected stationary bikes and treadmills. Recently, a Wall Street Journal report says some companies like Amazon and Nike have taken an interest in the Peloton bid.
Said companies have been fascinated by the high sales of the exercise brand during the pandemic. The interested parties have not been discouraged from returning to gyms during the post-lockdown period. The changes have left Peloton worth less than a fifth of its peak $50 billion valuations. Aside from that, there have been the latest PR disasters when TV characters had a heart attack when using Peloton exercise machines.
Amazon declined to confirm or refute whether it was considering an offer for the US exercise equipment maker.
The Peloton Bid Rumors
When the rumor was reported in the Wall Street Journal, it sent shares in the firm swelling more than 30 percent in after-hours trading. WSJ disclosed that Amazon.com, Inc. is one of the potential suitors interested in the Peloton bid. According to people keen on the matter, it could be possible since the stationary-bike maker’s stock plunges, and activists urge it to explore a sale.
The Financial Times first published Nike’s interest to look at the deal.
“We don’t comment on the speculations and rumors,” an Amazon spokesperson told the BBC. Peloton and Nike didn’t respond to comments on the matter.
When the COVID-19 pandemic forced gyms to close in 2020, demand for Peloton exercise equipment and virtual workout classes soared. It contributed to the upsurge of Peloton’s share prices. But as lockdown and pandemic-related restrictions eased, interest for its bikes and treadmills faded.
In August 2021, the company dropped the price of its flagship bike by 20 percent. Making it $1,495, as it announced its losses had widened and revenue growth had reduced.
The US Department of Justice and the Department of Homeland Security said they were looking into the company in the same month. Allegedly, after a child was pulled under one of its treadmills and killed, other customers also reported injuries.
Peloton warned investors in November 2021 that it expected revenue to slow in the incoming year.
“The primary drivers of our reduced projects are a more pronounced tapering of demand concerning the ongoing opening of the economy. Also, a richer than the anticipated combination of sales to our original bike,” Peloton said in a recent letter to shareholders.
Then last month, investment firm Blackwells Capital called for Peloton’s chief executive John Foley to be removed from his position and the business to be put up for auction.
Peloton and its customer base are “extremely attractive” to Nike, Apple, Disney, and Sony. In addition, they are looking to boost their presence in the home, health, wellness, and media spaces. This was what Blackwells said in a letter to Peloton.
Meanwhile, analysts at Wedbush Securities also assumed other bidders to emerge.
“We would be shocked if Apple is not forcefully involved in this Peloton bid process,” Wedbush Securities said.
“We believe there will be a few technology and consumer brand advocates interested in a potential bid with activists also pushing a sale.”
Peloton made headlines a few months ago. This comes after two television dramas, Just Like That, and Billions, depicts stories where characters die of a heart attack. It implies those characters die after using those bikes.
The company is about to publish its second-quarter earnings on Tuesday.
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