At a Glance:
- E-commerce giant Amazon is showing interest in buying Peloton Interactive Inc.
- Nike is also in the race; the company is looking for a bid.
- In early 2021, the market capitalization of Peloton has gone down to $8 billion from a peak of nearly $52 billion
Peloton’s share surged 30% in the extended trading
According to the various sources, e-commerce giant Amazon is showing interest in buying Peloton Interactive Inc. This comes at the time when Peloton Interactive; exercise bike makers are struggling to maintain growth with the effect of the pandemic.
Blackwells Capital, an activist investor urged Peloton’s board to put it for the sale. Resulting, in the company’s share, surging 30% in the extended trading on the news. Furthermore, According to sources, Amazon is thinking of offering exercise bike makers and is indulging in a conversation with the adviser on the procedures. On the other, Peloton is yet to decide on whether to explore the option of sale.
Peloton: Struggling To Grow
On 4th Feb, the Financial Times reported that Nike Inc. is also in the race; the company is looking for a bid for Peloton. However, the sportswear company is still under consideration and the company has not approached and had any conversation with Peloton.
During COVID-19 lockdowns, Peloton’s sales increased with people showing interest in home fitness equipment. But with the introduction of vaccination, and gradual reopening of the gyms, and several similar products being launched at the same time, Peloton’s encountered a huge decline in sales.
In November 2020, the demand and market for exercise bikes and treadmills reduced down than what was expected. Since then, the market capitalization of Peloton has gone down to $8 billion from a peak of nearly $52 billion at the beginning of 2021. Peloton may reach $10 billion market capitalization, if the stock’s gain still holds on 7 February.
Low Demand Of Connected Fitness Bikes And Treadmills
To settle the losses, Peloton reduced the price of popular bikes and increased its ad spending. However, the growth of the company is stagnant. In January, the exercise bike maker issued a statement saying the company is rethinking the size of the workforce and planning to reset the production levels. Also, the reports state, the company is further planning to temporarily stop its production of connected fitness bikes and treadmills due to low demand.
Also Read: COVID-19 Vaccine for under 5 might be available soon
