Amazon, Nike Eye Peloton Acquisition As Pandemic Gains Are Wiped Out
While not necessarily down and out just yet, it's safe to say that Peloton is on a downturn. After enjoying increased demand for its exercise machines and, as a result of that demand, a soaring stock price earlier in the pandemic, 2021 was a rough year for the company and 2022 hasn't gotten off to a much better start. Now, it sounds like Peloton's struggles may have attracted potential buyers, with some big names reportedly interested in acquiring the company.The Wall Street Journal reports that Amazon is one possible buyer, citing unnamed people familiar with Amazon's plans. WSJ says that there are other "potential suitors" as well but doesn't name who they are. However, the Financial Times reports that another interested party is none other than Nike, which considered buying Peloton in 2019 before it went public but ultimately never pulled the trigger on such a deal.
Those are two big names, but any potential deal is still a long way off, as both reports say that any buyout bids are still in their preliminary stages. The Financial Times reports that neither Amazon nor Nike has spoken to Peloton about a possible buyout, so there's no guarantee that either company will even make a formal offer at this stage. We could see even more suitors come out of the woodwork, though, so talks of a Peloton acquisition don't necessarily begin and end with Amazon and Nike.
It's easy to see the appeal, though. Amazon has been trying to break into the fitness space with its subscription-based line of Halo fitness trackers, so it's already trying something similar to what Peloton offers (just on a less expensive scale). According to these reports, one possible outcome of an Amazon buyout could see Amazon bundling a Peloton subscription in with Amazon Prime. While that makes sense, we'd hate to see what the addition of Peloton exercises would do to the ever-growing price tag of Amazon Prime.
Peloton
The big question is not whether interested buyers will make an offer, but rather whether or not Peloton would be open to the acquisition. Peloton CEO John Foley will have to accept the deal, as WSJ says that "he and other insiders" have 80% of Peloton's voting power.
The FT also reports that one shareholder, Blackwells Capital LLC, has been attempting to get the board to fire Foley and arrange a buyout deal with another company, but with ownership that only totals around 5%, Blackwells apparently has a lot of convincing to do if it wants to see such a plan come to fruition.
Still, with enough internal pressure to sell, Foley and his allies on the board may accept a deal. For now, there's little to no movement actually happening – just the whispers of potential purchases. With Peloton's stock price significantly diminished from its highs during the pandemic, and the specter of possible layoffs looming according to CNBC, this is could be a good time for potential buyers to strike, but it seems that depends on whether or not Foley wants to play ball.