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Shares of Peloton surged nearly 20% on Monday amid reports that the at-home fitness company, which is struggling with waning demand and slowing growth, is drawing interest from potential buyers including Amazon, Nike and Apple—though some experts don’t think a deal makes sense.
Wall Street loves to “ruminate” about potential M&A tech deals, and Peloton’s potential takeover is … [+]
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Peloton’s stock jumped 16% after news that several companies were looking to buy the at-home fitness equipment company: the Wall Street Journal reported Friday that Amazon was interested, while the Financial Times said a few hours later that Nike was also evaluating a bid.
Wedbush analyst Dan Ives wrote in a note that he would be “shocked if Apple is not aggressively involved in this potential deal process,” arguing that it would make “strategic sense” for the tech giant to buy Peloton.
Ives believes that an acquisition would be both an offensive and defensive move for Apple, as it would “catalyze the company’s aggressive health and fitness initiatives over the coming years” while preventing rivals Nike or Amazon from gaining an upper hand.
Other Wall Street experts are not so sure that any deal to buy Peloton makes sense: “We don’t see why companies like Nike, Amazon, Apple—or anyone else, for that matter, would want to own Peloton,” says Vital Knowledge founder Adam Crisafulli.
With no actual deal talks having yet taken place, Baird analyst Jonathan Komp pointed out in a note Monday that CEO John Foley is highly unlikely to sell Peloton, thanks to his management team’s “unwavering confidence” to grow as a stand-alone company in the long term.
“There’s no game more popular on Wall Street than ruminating over what companies the tech mega caps should buy,” says Crisafulli, adding that “Peloton’s financial profile isn’t the most compelling” and that any kind of big tech M&A deal could hit regulatory snags.