Amazon and Nike are considering buying Peloton

Deepak Gupta February 5, 2022
Updated 2022/02/05 at 5:58 PM

E-commerce and cloud giant Amazon has been consulting with its advisers about whether to buy Peloton, according to Wall Street Journal. And it might not be the only bigger company that has its eye on the fitness equipment maker: The Financial Time says Nike is also considering buying it. Neither company has spoken to Peloton yet and they may end up not making any offers.

Peloton became a hit at the start of the pandemic, as people sought fitness alternatives after their gyms closed due to lockdowns. In fact, it reached a market cap of $50 billion in January 2021 – a far cry from its current valuation of $8 billion. CNBC reported in January that the company had halted its production of bicycles and tires amid slowing demand caused by a number of factors, including fiercer competition. The company’s CEO John Foley later denied that Peloton was pausing production in a letter to employees, but admitted that it is “restarting [its] production levels for sustainable growth.”

A few days after the report came out, BuzzFeed News published a story about several workers claiming that the company owes them money for their unpaid work. The workers accuse Peloton of not paying overtime and work performed during breaks, as well as not reimbursing them for company expenses.

If Amazon really is considering acquiring Peloton, it could use the company to expand its health and wellness offerings and make it easier for customers to get their hands on one of its bikes or treadmills. It certainly has the ability to guarantee delivery delays, like what happened to Peloton last year, will not happen again. Like The newspaper notes, an acquisition would also give Amazon access to user data, which would be useful for its future health and wellness projects.

Peloton has not given any hints that it is looking for a new owner, but activist investor Blackwells Capital is calling for Foley to be fired and for the company to begin finding a potential buyer. Blackwells accused Foley of making decisions that cost the company $40 billion, including misleading investors about certain information and hiring his wife into an executive role.

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