Pedaling in stationary fashion toward a watershed moment in its 10-year history, pandemic darling Peloton blew a metaphorical tire, and potential suitors are circling to patch it up.
As Peloton prepares to report fiscal second quarter 2022 earnings on Tuesday (Feb. 8), ratings firms and market watchers are expecting slightly higher revenues on slowing sales, leaving the fitness brand searching for new pathways, with speculation turning to an imminent acquisition.
Chief among possible Peloton buyers at present is Amazon, which has the money — and more importantly the scale, with some 200 million Amazon Prime members — to make it work.
As PYMNTS’ Karen Webster wrote on Monday (Feb. 7), “An Amazon acquisition could mean potentially delivering the ‘Amazon Effect’ to fitness. It could use its commerce engine as the core to igniting a new connected health and wellness ecosystem that positions the bike and the treadmill as just another connected device consumers get to use as part of that experience.”
See also: Peloton and the Amazon Effect on Fitness
Some see Apple as the better choice, as its ecosystem is seen as better suited to the biomonitoring and software/hardware integrations vital to the Peloton experience.
On Monday (Feb. 7) Yahoo Finance reported on a note circulated by Wedbush Securities technology analyst Dan Ives saying, “Acquiring Peloton would be a major strategic coup and catalyze the company’s aggressive health and fitness initiatives over the coming years. With ~2.8 million paid subscriptions today and a very strong/unique competitive moat, Apple acquiring Peloton would be both an offensive and defensive acquisition in our opinion.”
Also on the shortlist of potential Peloton suitors is Nike.
Saying that “on balance, Nike would be the better owner,” The Washington Post reported that Nike “already has the connections with athletes and influencers to revive the Peloton name. Its brand would likely have cachet with engaged Peloton enthusiasts, many of whom will already be wearing its work-out gear. What’s more, Nike can be considered a luxury label if you look at the upper end of its price ranges, with jackets and sneakers topping $500.”
See also: Peloton Catches the Eyes of Amazon, Others for Takeover
Still others see Google as moving in on Peloton, whose stock tumble is likely to bring any final price down dramatically from what it would’ve been less than a year ago.
Looking at benefits to a Google acquisition, an Axios analysis in January said the search giant has “a proclivity for acquisitions, including consumer hardware, plenty of cash” and adding that Peloton would afford “a way to fight Apple on wellness. Plus, the Peloton tablets already run on Android. On the flipside, Google has enough bruises from health efforts to flinch a bit.”
That same article also made arguments for a Netflix acquisition (“The pairing of two companies who some investors believe have saturated their total addressable market, so as to expand that TAM”); and a possible run at Peloton by Microsoft (“It’s got the manufacturing, cloud software and (sorta) retail chops … plus there could be some gaming applications”).
Rumors are even swirling around UnitedHealthcare, the nation’s largest health insurer, which made a deal with Peloton in summer 2021 giving eligible fully insured members a one-year membership to streaming content from the Peloton app to their own devices.
See also: Plagued by Problems, Peloton’s Latest Crisis Clouds Broader Health and Fitness Trend
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