Amazon and Nike are exploring Peloton take over

Here are your pointers

  • Amazon and Nike are drawn in by Peloton’s rising sales of exercise bikes and treadmills during the epidemic.

  • Suitors have not been frightened off by the firm’s return to business following the lockout, which has reduced its value to less than a quarter of its high $50 billion estimates.

  • There have also been recent public relations catastrophes caused by heart attacks by TV actors using Peloton machines.

  • Amazon would neither confirm nor deny if it was considering making a bid for the US workout equipment manufacturer.

  • When the rumour was reported in the Wall Street Journal on Friday, shares of the company surged more than 30% in after-hours trading.

  • “We don’t comment on rumour and conjecture,” an Amazon official said.

  • The once-popular stock has seen its shares plummet in recent months, dropping more than 80% of its value last year.

  • When the Covid epidemic forced gyms to close in 2020, demand for Peloton’s exercise equipment and virtual training sessions skyrocketed, soaring the company’s stock price.

  • However, as lockdowns have been lifted, the demand for its bikes and treadmills has dropped.

  • In August, the company reduced the price of its flagship bike by 20% to $1,495 (ÂŁ1,105), revealing that its losses had grown and sales growth had stalled.

  • Peloton cautioned investors in November that sales will drop next year.

  • Last month, investment firm Blackwells Capital urged Peloton CEO John Foley to be fired.

  • According to Blackwells, Peloton and its client base are “very appealing” to firms such as Nike, Apple, Disney, and Sony eager to expand their position in the home, health and wellness, and media industries in a letter to Peloton’s board.

  • Wedbush Securities analysts predict that further bids will emerge. “We’d be surprised if Apple isn’t aggressively involved in this prospective purchase process,” they added, naming Disney another possible contender for the workout firm.

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Even before Peloton’s troubles, there were (very erroneous) takeover rumours circulating, speculating on purchases from firms like as Amazon, Apple, and Nike merely because people “could see it.”… I don’t see Foley wanting to sell at a price comparable to what they went public at given the prices he has seen when the company was booming, but he has been diluted to 10% ownership today, so he only has so much influence left… Personally, I believe that tough days are ahead for the firm, but I am determined to persevere since Peloton’s narrative is far from done.

Amazon buying Peloton is just itself buying some excess inventory…