Topline
Peloton Interactive shares surged 28.42% to $31.67 in after-hours trading Friday after the Wall Street Journal reported Amazon is considering acquiring the exercise equipment maker, which has been urged by activist investor Blackwells Capital to consider a sale following a yearlong slide in its stock price.
Key Facts
Amazon has approached advisers about a potential deal to buy Peloton, the Wall Street Journal reported Friday, citing unnamed sources who said that other potential acquirers are circling.
A Peloton spokesperson declined to comment, describing the Wall Street Journal story as “rumors and speculation.”
Amazon did not immediately respond to a request for comment.
Key Background
Exercisers shut out of gyms by lockdowns and Covid outbreaks purchased thousands of Peloton’s pricey exercise bikes and signed up for its online classes, driving its stock to a high of $171.09 in January 2021, giving the company a market value of around $50 billion. By February, Peloton’s market capitalization had declined to $8.12 billion following product recalls, unflattering appearances on shows like Sex and the City sharply slower revenue growth and a slowdown in use by existing customers, among other factors. In January, Blackwells Capital, which owns a roughly 5% stake in the company, urged the Peloton to consider a sale and to fire CEO John Foley, whom Blackwells accused of “multiple leadership failures.” In January, analysts speculated that Google might purchase Peloton to bolster its forays into wellness with projects like Google Fit.
What We Don’t Know Yet
Amazon has yet to make a formal offer to Peloton, and there’s no guarantee that Peloton would accept one, the Wall Street Journal reported.
Further Reading
“Amazon, Other Potential Suitors Explore Peloton Deal” (Wall Street Journal)
“What Is Happening With Peloton? And Other Pandemic Lessons” (Forbes)
