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Peloton stock spikes on reports Amazon, Apple and Nike may be kicking tires

MoneyWatch: Peloton CEO disputes report
MoneyWatch: Peloton's CEO pushes back after report that it paused manufacturing its bikes and treadmills 06:29

The stock price of interactive stationary-bicycle maker Peloton climbed Monday amid unconfirmed reports that potential big-name suitors, including Amazon, Apple and Nike, are considering buying out the embattled fitness company. 

Peloton shares were up 32% in premarket trading Monday following reports that such tech giants and consumer powerhouses are mulling bids. By the afternoon, Peloton's stock price was up about 15%, to around $28 a share. At market close, shares were trading at $29.75.

The Wall Street Journal on Friday reported that Amazon and others are in the early stages of considering an acquisition, citing people the news outlet said were familiar with the matter. The Financial Times reported Nike also was considering acquiring the home fitness equipment maker, which boasts roughly 3 million subscribers to its streaming video-exercise offerings. 

Some Wall Street experts said this roster of suiters makes sense. "For Amazon in particular, we see several potential benefits from a Peloton acquisition," analysts at Truist Securities said in a research note. "Peloton would add a different dimension to Amazon as an experiential brand that helps customers live a healthy lifestyle. Such a move would position Amazon ahead of tech peers like Apple and Google." 

Amazon in particular has the "financial wherewithal" to successfully acquire a company like Peloton, the analysts added. 

An Amazon spokesperson told CBS MoneyWatch the company does not "comment on rumors or speculation."

The sports gear brand Nike "has been increasingly focused on interacting more directly with consumers, and being able to market to a large base of consumers via interactive workouts could aid Nike in this strategy," Wedbush Securities Analyst Dan Ives said in a note to CBS MoneyWatch. 

"With media reports swirling that Peloton could be up for sale with Amazon and Nike as potential suitors, we would be shocked if Apple is not aggressively involved in this potential deal process," Ives added.

A successful bid would catapult any new owner of Peloton to the forefront of the health and fitness market and "gain a major foothold into the living rooms of consumers globally," Ives said. 

Slowing subscriber growth as the U.S. emerges from strict social distancing and other pandemic-related measures could make it a lousy investment on the other hand, according to Ives. 

Going downhill

Demand for Peloton's tech-enabled bikes and treadmills soared early on during the pandemic, when consumers were largely confined to their homes, eager to exercise in their own spaces and looking for ways to connect virtually with like-minded people. 

But its shares have since plummeted, from a pandemic peak of nearly $163 in December 2020, as the virus recedes and consumers return to exercising outdoors and at indoor gyms and fitness studios. In early 2021 demand for its machines slowed, and Peloton found itself with more inventory than it could move. 

Recent negative pop-culture references to the exercise equipment maker as well as the death of a child that was linked to one of its treadmills have also cast a pall over the company's image.

Activist investor Jason Aintabi, chief investment officer at Blackwells Capital, last month called for the firing of Peloton co-founder and CEO John Foley and for the company to explore a sale.

All of these events have driven Peloton's total stock market value down more than 80% from a high of nearly $50 billion in January 2021. 

Foley and other Peloton executives hold roughly 80% of the company's voting shares and would likely have to approve a sale. They'll have a chance to answer Wall Street analysts' questions on the matter Tuesday, when Peloton is expected to report its earnings for the company's second quarter. 

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