Peloton stocks climb on reports of Amazon, Apple and Nike could be kicking the tires

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The share price of interactive stationary bike maker Peloton soared on Monday amid unconfirmed reports that high-profile potential suitors including Amazon, Apple and Nike are planning to take over the struggling fitness company.

Shares of Peloton rose 32% in premarket trading on Monday following reports that these tech giants and major consumer powerhouses are considering deals. By afternoon, Peloton’s stock price had risen about 15% to around $28 per share. At market close, the shares were trading at $29.75.

The Wall Street Journal reported on Friday that Amazon and others were in the early stages of considering an acquisition, citing people the outlet said had knowledge of the matter. The Financial Times reported that Nike is also considering acquiring the home fitness equipment maker, which has around 3 million subscribers to its streaming video exercise offerings.

Some Wall Street pundits said that list of suitors makes sense. “For Amazon specifically, we see several potential benefits from an acquisition of Peloton,” Truist Securities analysts said in a research note. “Peloton would add a different dimension to Amazon as an experiential brand that helps customers lead healthy lifestyles. Such a move would position Amazon ahead of technology peers like Apple and Google.”

Amazon in particular has the “financial means” to successfully acquire a company like Peloton, the analysts added.

An Amazon spokesperson told CBS MoneyWatch that the company does not “comment on rumors or speculation.”

Sports equipment brand Nike “has increasingly focused on interacting more directly with consumers, and being able to market to a broad consumer base via interactive workouts could help Nike in this. strategy,” Wedbush Securities analyst Dan Ives said in a note to CBS. MoneyWatch.

“With media reports that Peloton could be listed with Amazon and Nike as potential suitors, we would be shocked if Apple did not aggressively engage in this potential deal process,” Ives added.

A successful offering would catapult any new Peloton owners to the forefront of the health and fitness market and “take a major place in consumer living rooms around the world,” Ives said.

Slowing subscriber growth as the U.S. emerges from strict social distancing and other pandemic-related measures could make it a lousy investment, Ives said.

Downhill

Demand for Peloton’s tech bikes and treadmills soared at the start of the pandemic, when consumers were largely confined to their homes, eager to exercise in their own spaces and seeking ways to connect. virtually with like-minded people.

But its shares have since fallen, after a pandemic peak of nearly $163 in December 2020, as the virus recedes and consumers resume exercising outdoors and in indoor gyms and fitness studios. . At the start of 2021, demand for its machines slowed and Peloton found itself with more inventory than it could move.

Recent negative pop culture references to the exercise equipment manufacturer as well as the death of a child linked to one of his treadmills also tarnished the company’s image.

Activist investor Jason Aintabi, chief investment officer at Blackwells Capital, called last month for the firing of Peloton co-founder and CEO John Foley and for the company to explore a sale.

All of these events caused Peloton’s total market value to drop more than 80% from a high of nearly $50 billion in January 2021.

Foley and other Peloton executives own about 80% of the company’s voting stock and are likely expected to approve a sale. They’ll have a chance to answer Wall Street analysts’ questions about the matter on Tuesday, when Peloton is expected to report its results for the company’s second quarter.

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