Peloton Interactive, the exercise bike manufacturer, is garnering attention from potential buyers, including industry giants Amazon and Nike, as it grapples with a slowdown in growth. This news caused Peloton’s shares to skyrocket by 30% during after-hours trading.

An insider familiar with the matter disclosed that Amazon is contemplating making an offer to acquire Peloton and is currently seeking advice from consultants on the potential deal. Nevertheless, Peloton has not yet determined whether it will explore a sale.

Alongside Amazon, sportswear powerhouse Nike is reportedly assessing the possibility of bidding for Peloton, according to sources cited by the Financial Times. These considerations are still in the early stages, and no formal discussions have taken place between Nike and Peloton.

While Peloton, Nike, and Amazon have remained tight-lipped regarding these reports, it is worth noting that Amazon declined to comment.

During the COVID-19 pandemic, Peloton witnessed a surge in sales as individuals sought home fitness equipment. However, as vaccinations increased and fitness centers reopened, the demand for Peloton’s exercise bikes and treadmills began to dwindle, compounded by the entry of competitors offering similar products into the market.

In November, Peloton alluded to a faster-than-anticipated slowdown in demand, resulting in a significant decline in its market capitalization from a peak of nearly $52 billion in early 2021 to approximately $8 billion. If Peloton’s recent stock gains persist, the company’s market capitalization could reach the $10 billion milestone.

Just last week, activist investor Blackwells Capital called for the immediate removal of Peloton’s CEO, John Foley, accusing him of entering deals that incurred high fixed costs and of misleading investors about the necessity of raising capital. Blackwells also criticized Foley for employing his wife as a key executive and committing to a long-term office lease in New York. The investment firm has urged the board to consider selling to potential buyers such as Walt Disney Co, Apple Inc, Sony Group, or Nike Inc.

In an effort to counteract its stagnant growth, Peloton has reduced the price of its popular bike and ramped up advertising expenditures. Despite these measures, the company continues to face challenges.

In January, Peloton revealed that it was reassessing its workforce size and readjusting production levels due to a significant decline in demand, resulting in a temporary halt in the production of connected fitness bikes and treadmills.

While Peloton’s declining share price has frustrated investors, analysts note that the company may be a difficult acquisition target due to its two classes of stock, which effectively grants insiders control over the business.

Overall, Peloton’s future is uncertain as it navigates a challenging market and potential acquisition offers.

Useful links:
1. Financial Times: Peloton attracting interest from Nike and Amazon
2. Reuters: Peloton’s market cap plunges after earnings forecast cut