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Sunday, July 14, 2024

Amazon, Nike Consider Bids to Buy Peloton

  • Peloton is drawing interest from potential buyers.
  • Amazon and Nike could be suitors for the at-home fitness company.
Peloton/Design: Alex Brooks

Peloton’s controversial year and underwhelming sales have made it a takeover target and the at-home fitness giant is drawing interest from potential buyers, including two giants — Amazon and Nike.

Last month, Peloton shareholder Blackwells Capital called for the removal of the company’s CEO, chairman, and co-founder John Foley over concerns about the company’s performance. Blackwells Capital also suggested that Peloton’s board of directors consider a sale.

Despite the challenges, a Peloton sale stands to be significant. Peloton has a market cap of $8.94 billion — a drastic decline from a company-high market cap of $44.38 billion in 2020. 

Now, Peloton’s business has piqued the interest of Nike and Amazon, but no deal is imminent.

Peloton’s potential sale follows a tumultuous year for the New York-based company. 

  • It reportedly lowered its projected apparel revenue for fiscal 2022 from $200 million to $150 million due to supply chain issues and other “macro factors.”
  • The company posted a net loss of $376 million in fiscal Q1 compared to a net income of $69.3 million for the same period the year prior. 
  • Shareholders have lost nearly $40 billion in wealth; Foley has pocketed more than $115 million from selling stock.

Peloton shares rose more than 30% in extended trading Friday after news of a potential sale circulated. 

Changes Coming 

Peloton recently hired McKinsey & Co. to evaluate its cost structure and potentially eliminate jobs.

The company has discussed closing 15 of its 123 retail locations and announced added delivery and setup costs, citing inflation.

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