Peloton’s not-good-very-bad demise from its pandemic peak — lost more than $20 billion in value since November and becoming a dangerous subplot in primetime TV — has sparked speculation that the affiliate fitness company is a target for acquisition, but by who ? A Friday night report from the Wall Street Journal puts Amazon out as one of the “potential suitors” who may be considering a deal — just as markets are closed for the weekend and just days before Peloton releases its second-quarter 2022 earnings report on Feb. 8. The suggestion alone caused Peloton’s stock price to spike, pushing it up 20-30 percent in after-hours trading.
Peloton’s yo-yo fortunes over the past two years are well documented, but combine the entrenched tech giants trying to improve their health and fitness portfolios and the reality of gyms reopening, there are some points to connect. In recent weeks, some reports have suggested Apple as a possible landing site, but that seems unlikely. Apple’s health approach uses the Watch first, then connects services to whatever fitness equipment customers prefer, not expensive workout-specific hardware that can be replaced with a cheaper bike and BYO tablet.
Amazon makes a little more sense as a destination, even if it’s just a little more. There was a near-launch of a Peloton-esque “Prime Bike” in 2020 that I still can’t figure out, plus two attempts to track own fitness wrist wear with the Halo Band in 2020 and Halo View in December. Shelling out double-digit billions — a purchase could cost something in the neighborhood of the $13.7 billion Amazon spent to acquire Whole Foods — on Peloton would be an expensive but effective way to compete in the fitness/health sector. to get.
According to the WSJ, Amazon is working with advisors to consider the next step. Whether a takeover attempt comes from the company or someone else is still up in the air. Also clouding the situation, according to the paper, is that CEO John Foley and other insiders own 80 percent of Peloton’s voting stock, so calls from activist investors to sell won’t carry much weight. Either way, we’ll probably have a better idea of the company’s future by the time the earnings report comes in Tuesday afternoon.