Peloton's unique combination of explosive popularity and recent misfortunes appears to be attracting multiple potential buyers, according to a slate of recent reports.
The exercise equipment maker saw its star rise dramatically during the pandemic on the backs of individuals looking for an alternative to in-person classes and gyms. The surging demand led to a peak valuation of around $50 billion.
However, as the worst of the COVID-19 pandemic's peak faded, so too did Peloton's valuation, which now sits closer to $10 billion. The company itself pointed to the reopening of gyms as one of the main reasons for negative movement in its recent quarterly financial releases.
However, it was also impacted by a spate of bad public relations moments in a short time, including a recall following one child being killed by an apparent design flaw with its top-end treadmill, and a run of several high-profiles characters in popular premium cable series being killed off by having heart attacks while riding its bikes.
Given the wounded state of the would-be fitness giant, it's likely no surprise that potential suitors are beginning to come knocking.
News began to emerge from multiple sources last Friday, February 4, of just who those suitors might be. According to sources speaking to The Wall Street Journal, Amazon is one of them, with ongoing talks currently proceeding with its own financial advisers about a potential deal.
Meanwhile, The Financial Times reported that Nike has also been making preliminary moves to put together a potential offer.
Although it's unclear exactly how receptive Peloton would be to either bid, BBC News noted that investment firm Blackwells Capital had already advised that current CEO John Foley be removed from his position and that the business should be sold off in a letter to the Peloton Board sent out last month.
While Blackwells didn't name Amazon, it did predict Nike's participation, as well as potential interest from Disney, Sony, and Apple. Analysts at Wedbush Securities told the BBC that it, too, expects Apple to be an aggressive participant in any possible purchase of the slumping fitness business.
News of what could be shaping up to be a bidding war pushed Peloton's shares up 30% in after-hours trading on Friday night. While the share price had slumped from that peak by mid-morning on Monday, it remained more than $5 above its position at the previous week's closing bell.
If sources confirm Apple's participation, or if Peloton acknowledges the reception of an official offer, those prices will very likely jump again soon. None of the reported participants have, so far, agreed to comment on the potential transaction.