There has been a surge of demand in the fitness and health markets after the pandemic forced everyone to stay indoors. Peloton, which is an exercise equipment-making company, saw a dramatic rise during the pandemic for people that were looking for an alternative to regular gyms. It now looks like both Amazon and Nike are interested in acquiring Peloton, among others.
The high demand during the pandemic led to the company's valuation of around $50 billion at its peak. Unfortunately, as things started going back to normal, the valuation faded away which now sits at around $10 billion. In its recent quarterly financial release, the company itself pointed out that the reopening of gyms is perhaps the main reason for its downward valuation.
According to the Wall Street Journal, Amazon is currently proceeding with its financial advisers about a potential deal to acquire Peloton. The Financial Times reported that Nike has also been making some moves to make a potential offer as well. A report from BBC News pointed out that investment firm Blackwells Capital advised the current CEO John Foley to be removed from his position and for the business to be sold off.
The investment firm owns 5% of Peloton stock but holds 80% of the voting power and also predicted Nike's interest as well as potential interest from Disney, Apple, and Sony.
The hint of a potential bidding war racked up Peloton's shares by 30% on Friday night, which slumped by mid-morning on Monday. The shares are expected to rise as more companies, including Apple, could potentially come with an official offer.