Exercise equipment manufacturer Peloton is reportedly attracting several large companies, which are interested in taking over its operations. After experiencing a surge in its business over the pandemic, the company is now slowly deteriorating, leading shareholders to call for its sale.
Over the past months, Peloton has lost around $40 billion from its market value. The decline was fueled mainly by failed investments, supply chain issues, multiple recalls, and a general decline in the demand for its products.
Sources with knowledge in the matter claimed that e-commerce giant Amazon had expressed interest in acquiring the company. It is reportedly only one of many other companies lining up to bid on the embattled manufacturer.
The same sources claimed that Amazon has been engaging in talks with its financial advisers to assess the proposed acquisition. As talks are still ongoing, it isn't yet clear if Amazon will make a final offer. It also isn't clear if Peloton would accept its offer.
Sportswear company Nike is also reportedly considering making an offer to buy out Peloton. Sources claimed that Nike was now in the preliminary stages of reviewing the potential acquisition deal. Separately, analysts have speculated that Apple may also be considering a takeover offer.
Peloton hasn't started a formal selling process yet, but there has been plenty of interest from other companies looking to acquire it. Peloton's stock soared Friday amid reports that Amazon was considering an acquisition offer.
Peloton's stock soared 28.42% to $31.67 in after-hours trading Friday after the Wall Street Journal reported that Amazon is considering buying the exercise equipment maker. Peloton has been urged to consider a sale by activist investor Blackwells Capital following a yearlong stock price decline.
It's unclear how Amazon or Nike would integrate Peloton's technology or user base into their own business structures right now. In light of Peloton's continuous supply chain challenges, Amazon's logistics arm would be a huge help and could in theory, turn around the company. It also needs to be noted that Amazon has a history of actively investing in health and wellness startups. The company already has its own line of fitness bands, the Halo Band, which debuted in 2020, and the Halo View, which arrived in December. Amazon also recently acquired Whole Foods for more than $13 billion.
Peloton's current subscription service may be coupled with Amazon's Prime membership program, as Amazon has done in the past with prior acquisitions to get customers to sign up. If Amazon goes through with the deal, Peloton's products will become some of the most expensive products in its inventory.
