The stock price of the Peloton exercise firm soared by over 30% in after-hours trading on Friday. This came after it was revealed that a number of major brands ranging from Amazon to Nike were interested in taking over the exercise company.
Peloton enjoyed a rapid rise in popularity during the pandemic. This saw the brand hit a peak valuation of $50 billion as people flocked to buy its exercise bikes in a bid to stay fit during lockdown.
However, as lockdown conditions eased and people returned to the gyms, Peloton has seen its popularity dwindle. Plus with a series of PR disasters and safety concerns, the exercise brand has seen its valuation shrinking to just one fifth of what it once was.
Who’s leading the race to save Peloton?
While Amazon have so far declined to make a comment on the issue, it is believed that the ecommerce brand is among the frontrunners to make a takeover of Peloton. Amazon has already explored the health and wellness markets with its takeover of the Whole Foods grocery chain for $13.7 billion in 2017. Last year also saw Amazon launching its Halo product which aims to track its users’ sleep and exercise patterns. As such, it’s easy to see how the acquisition of Peloton could make perfect sense for Amazon.
However, it has also emerged that Nike is currently evaluating making a bid for the exercise firm and Apple is also expected to start aggressively monitoring the potential sale of Peloton.
The topic of someone making a takeover of Peloton has gained traction since the investment firm Blackwells Capital made a report last month saying that the brand’s customer base is hugely attractive to companies such as Nike, Sony, Disney and Apple. The report was damning in how Peloton’s chief executive had handled the company, but insisted that the brand would be a good fit for other companies who were wishing to expand into the health and wellness areas.
Peloton’s catalog of failures
Peloton has become perhaps the emblem of a lockdown brand that has struggled to continue its rapid growth into the era of the ‘new normal’. The exercise company will be publishing its second quarter earnings this week, and it’s widely expected to be more bleak news for a firm that has seen its market cap shrink from $50 billion to $8 billion.
It’s a tragic picture for a previous stock market favorite that saw its share price skyrocket by 440% in 2020. However, a series of blunders has meant that Peloton has quickly become something of a laughing stock.
Alongside numerous safety concerns, Peloton exercise bikes have also become the subject of jokes in TV shows such as And Just Like That and Billions where lead characters have died after exercising too much on the brand’s products. Despite this damage, it seems that Peloton still has enough value to be attractive to some of the world’s biggest brands.