We recently reported that an activist investor in Peloton had called on the board to fire the CEO and explore a sale of the company, whose share price had fallen dramatically due to declining demand for its connected fitness solutions. Now Peloton’s share price has risen by just over a quarter (to $31.10 last Friday – still well below the $150 a year ago) after reports in the media that Amazon and Nike could be interested in a takeover. However, according to the Wall Street Journal and Financial Times, respectively, the deliberations of Amazon and Nike are still at an early stage, and talks between the parties have not even taken place yet.
Last November, Peloton was forced to drastically slash its revenue forecast for its fiscal year that runs through mid-2022 by as much as $1 billion. The reason was that a drastic price reduction of the original Peloton training bike in August caused sales of the new, significantly more expensive bike to slump. At the same time, the home fitness trend, which had initially been growing steadily during the Covid pandemic, seemed to saturate, and lower-priced competitors made their appearance on the market. In the meantime, it was also rumored that the production of the Peloton bikes would be temporarily paused due to falling demand, which the company denied.