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Peloton Shares Soar After Report Amazon Is Interested In A Deal

EsperanzaSeiffert40 2022.02.10 18:52 조회 수 : 1

Peloton's shares soared more than 30 percent in after-hours trading on Friday after reports that Amazon and CardioPower T60 others were interested in a potential deal with the beleaguered fitness company. 

After closing at $24.60 on Friday, the company's shares jumped to a high of $34.09 in after-hours trading.

The boost came after the reported Amazon is exploring an offer for Peloton and is speaking with advisers about whether and how to proceed. 

Peloton has not yet decided whether it will explore a sale, according to the source.

Meanwhile, the Financial Times reported late on Friday that Nike is also evaluating a bid for Peloton, citing people briefed on the matter, who said the considerations are preliminary and Nike has not held talks with Peloton.

After closing at $24.60 on Friday, the company's shares jumped to a high of $34.09 in after-hours trading on news that Amazon is kicking the tires on the troubled exercise-bike maker

Peloton shares have been going downhill since hitting a 52-week high of 157.83 last year

The rumors of a potential sale come at a critical time for Peloton, whose market value had dipped to $8 billion after it's high of $50 billion a year ago 

Amazon  and Nike are reportedly interested in buying Peloton, which has seen its value plummet during the past year

There are also other potential unnamed suitors interested in purchasing the exercise equipment company - although there is no imminent deal on the horizon.  

The rumors of a potential sale come at a critical time for Peloton, which saw its market value crater to $8 billion after peaking at $50 billion a year ago.  

The company has failed to reach the heights which allowed it to make a fortune peddling high-end exercise bikes and treadmills during the first year of the pandemic. 

The deal would make sense for Amazon, which could have multiple potential ties between Peloton and their already existing businesses, WSJ reported.

Amazon's fleet-and-logistics arm could help with Peloton's supply-chain issues and a Peloton subscription could potentially be bundled with Amazon Prime, which offers users waived shipping costs, a streaming service and more for a monthly or annual fee, WSJ reported. 

Its quarterly revenue has been steadily dropping in recent months due to slumped demand. Although the company references its latest time frame as first quarter 2022, its earnings for that period were released last November

Peloton co-founder John Foley said 'rumors that we are halting all production of bikes and Treads are false' in response to the leaked memo in January 

Amazon has already bundled the services of other companies for Amazon Prime, which starting this month will cost $139 a year. 

Amazon has also been pushing into connected health in recent years, launching its Halo Health and Wellness tracker. 

Last week, Blackwells Capital called on the board of Peloton to remove CEO John Foley immediately, accusing him of deals that set high fixed costs and for holding on to excessive inventory, while misleading investors about the need to raise capital.

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

The investment firm, run by Jason Aintabi, has also urged the board to put the company up for sale to a buyer like Walt Disney Co, Apple Inc, Sony Group or Nike Inc, Reuters reported on Sunday.

In January, it was reported that Peloton was considering cutting jobs and raising prices as demand for its equipment slumps amid record inflation.

The fitness giant has sought help from consulting group McKinsey & Co. to get its finances in order after it slashed its future earnings outlook for 2022 by $1 billion last November, down to between $4.4 billion and $4.8 billion.

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