Amazon is considering offer for Peloton, source says; report says Nike is also evaluating the offer

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Feb 4 (Reuters) – Peloton Interactive Inc (PTON.O) has attracted interest from potential buyers including e-commerce giant Amazon.com Inc, according to a person familiar with the matter, as the bike maker d Fiscal year is striving to sustain a pandemic fueled growth.

Peloton shares jumped 30% in extended trading on the news, which comes days after activist investor Blackwells Capital urged the company’s board to put it up for sale.

Amazon is considering an offer for Peloton and talking with advisers about whether and how to proceed, a source said. Peloton has yet to decide if it will consider a sale, according to the source.

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Meanwhile, the Financial Times reported on Friday evening that sportswear company NikeInc was also evaluating a bid for Peloton, citing people briefed on the matter, who said the considerations were preliminary and that Nike had not had any discussions with Peloton.

Peloton and Nike did not immediately respond to a request for comment from Reuters, while Amazon declined to comment.

Peloton sales have exploded during the COVID-19 shutdowns, with many home fitness equipment. But his fortunes began to fade as vaccinations increased, gyms reopened and rivals offered competitive products.

In November, it hinted that demand for its exercise bikes and treadmills was slowing faster than expected, and its market capitalization since then has fallen to around $8 billion, from a peak of nearly $52 billion. dollars at the start of 2021.

If the stock’s gains hold on Monday, Peloton could hit the $10 billion market capitalization threshold.

A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Marketplace in New York City, New York, U.S., September 26, 2019. REUTERS/ Shannon Stapleton

Blackwells Capital last week called on Peloton’s board to immediately fire CEO John Foley, accusing him of deals that set high fixed costs and hold excessive inventory, while misleading investors about the need to raise capital. Read more

Blackwells criticized Foley for hiring his wife as a key executive and committing to a 20-year, 300,000-square-foot lease for offices in New York City, among other places.

The investment firm, led by Jason Aintabi, also urged the board to put the company up for sale to a buyer like Walt Disney Co (DIS.N), Apple Inc (AAPL.O), Sony Group ( 6758.T) or Nike Inc, Reuters reported on Sunday. Read more

Peloton has tried to cushion the blow to its growth by cutting the price of its popular bike and increasing its ad spend, but growth remains stagnant.

Last month, Peloton said the company was reviewing its workforce size and “resetting” production levels, following a report that it was temporarily halting production of fitness bikes and connected treadmills after a significant drop in demand. Read more

While many investors have become frustrated with Peloton due to a sharp drop in its share price, analysts also note that the company could be a difficult acquisition target due to its two classes of shares, effectively allowing initiates to control it.

The news was first reported by The Wall Street Journal. (https://on.wsj.com/3AVMIf7)

The growth of the fitness bracelet market has prompted tech giants such as Apple Inc (AAPL.O) and Samsung (005930.KS) to introduce health tracking features including an electrocardiogram and a pressure sensor arterial. Google (GOOGL.O), owned by Alphabet Inc, completed its acquisition of fitness tracking company Fitbit Inc in January.

Tech giants including Amazon and Alphabet also saw their valuations rise after blockbuster results this week. A day after Facebook owner Meta Platforms (FB.O) suffered the largest loss in stock market value in history for a U.S. company, Amazon posted the biggest single-day increase in value ever. Read more

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Reporting by Rithika Krishna, Tiyashi Datta, Nivedita Balu and Shivam Patel in Bengaluru and Greg Roumeliotis in New York; Editing by Devika Syamnath, Peter Henderson, Anil D’Silva and Kim Coghill

Our standards: The Thomson Reuters Trust Principles.

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