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After enjoying increases during the lockdown, Peloton is now plummeting. Unlike the lockdown period, there is now a sharp decline in the demand for the company’s products.
It appears Peloton Interactive (NASDAQ: PTON) has caught the attention of potential buyers, including e-commerce company Amazon (NASDAQ: AMZN) and Nike (NYSE: NKE). The matter was revealed by a reliable source, who said that Amazon is already considering making an offer to Peloton while Nike is also exploring a bid for the exercise equipment and media company. Also, the company’s shares climbed 43% in after-hours trading on the 7th of February, a day after an activist investor encouraged the company to consider a sell-off. Activist shareholder Blackwells Capital urged Peloton’s board to consider putting the company up for sale. Some of the buyers Capital suggested are Apple (NASDAQ: AAPL) and Walt Disney (NYSE: DIS).
According to the source, Amazon has started working on putting an offer on the table for Peloton. The source said the e-commerce giant is in talks with advisers on if to proceed with the acquisition or not. For now, Peloton has not decided on exploring a sale. Citing people familiar with the matter, the Financial Times reported that as Amazon considers an offer for Peloton, Nike wants to also bid for the company. However, the report stated that the sale option is still in the preliminary stage. In addition, neither Amazon nor Nike has held any discussion with Peloton considering the bids.
Nike and Amazon Eye Peloton Amid Losses
Peloton is one of the companies that benefited as the pandemic forced people to stay home. During the lockdown, the exercise equipment manufacturer released new products to meet increased customer demand. At the time, gyms were disallowed from functioning to curb the spread of the coronavirus. Therefore, many started working out in their homes and began to buy exercise equipment for themselves. This was beneficial to Peloton, which saw high demand for its products and even used the medium to release new products.
After enjoying increases during the lockdown, Peloton is now plummeting. Unlike the lockdown period, there is now a sharp decline in the demand for the company’s products, leading to losses. Amid the reversal, Peloton has lost about $40 billion from its market valuation over the past year. As of November 2021, Peloton’s market cap had reduced to around $8 billion, up from almost $52 billion recorded in early 2021. If the exercise equipment maker maintains the 43% gain it had last week, its market cap could reach about $10 billion.
Currently, in the pre-market trading, Peloton is up 22% to $30.15. Except for the recent increases, Peloton has been declining. The company has dropped 83.03% in a year and has fallen 31.21% since the beginning of 2022. PTON declined 52% in the last three months and 28.43% over the past month. Furthermore, the company has lost nearly 10% in the last five days.