Peloton stock jumps 25% after reports say Amazon and Nike are both exploring a takeover of the battered pandemic darling

• Peloton stock surged 25% on Monday after reports of takeover interest from Amazon and Nike.
• The digital-fitness company's market value has plummeted from $50 billion last year to $8 billion.

Peloton stock soared 25% in regular trading Monday after reports swirled that Amazon and Nike are among the companies exploring takeover bids for the embattled fitness brand.

The Wall Street Journal reported Friday that Amazon has been in talks with advisors about a potential deal, but there's no guarantee of an offer yet. Peloton's stock soared as much as 30% in after-hours trading Friday after The Journal's story was published.

The Financial Times separately reported on Saturday that Nike was considering making a bid for the business.

Peloton was among the early winners of the COVID-19 pandemic, as people scrambled to buy fitness equipment when gyms and other exercise venues were closed to slow the virus' spread.

But as lockdowns eased and the fear of going out dissipated, the company was eventually hit by disappointing sales, elevated costs, and lower demand for treadmills — a situation described by an employee as "pretty gloomy." Peloton stock is down more than 80% from its pandemic highs.

The US fitness-equipment maker's market capitalization currently stands at $8 billion, a fraction of its peak value of $50 billion last year, opening the door to an opportunistic suitor buying the company at a hefty discount.

Activist investor Blackwells Capital in a letter last month called on Peloton to fire its CEO James Foley and pursue a sale, following a slump in its stock. The letter singled out Apple, Disney, Sony, and Nike as potentially interested parties.

Wedbush analyst Dan Ives said it would be shocking if Apple isn't "aggressively involved" in a possible bidding war for Peloton as this acquisition would be a major strategic coup that builds on its fitness initiatives.

"Apple, through its Fitness+ subscription service and Apple Watch strategy, would be able to leverage the Peloton services and flywheel to significantly bulk up its healthcare initiatives which have been a key strategic linchpin for (Tim) Cook," Ives said in a Monday note.

The analyst noted Peloton's acquisition would likely be in the $12 billion to $15 billion range, depending on the timing and competitive process.

"Apple may be forced into this deal if Amazon, Nike, or potentially Disney aggressively goes after Peloton in a defensive blocking strategic move," he added.

Peloton stock was last up 24.8% on Monday at $30.50 a share, and is down 31% so far this year.

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