Because the pandemic took maintain, Peloton’s (NASDAQ: PTON) inventory boomed because it noticed rising demand with folks choosing at-home exercises moderately than going to the health club. Bike gross sales, subscribers, and members grew at unprecedented charges, with John Foley on the helm. Since then, the corporate has skilled provide chain points, declining demand, and John Foley transitioning to Govt Officer. Regardless of these points, it has a robust model, and with a market cap of roughly $10 billion, it might be a pretty acquisition goal, and we take a look at two of its potential suitors.
Nike
Nike (NYSE: NKE) is a multinational company that designs and manufactures footwear, attire, sporting items, and extra. The Monetary Occasions just lately reported that Nike could be desirous about buying Peloton, which might match its model and digital technique and permit it to gather knowledge.
The Nike model is among the most well-known manufacturers globally, notably within the health area. It has been increasing within the health area with the ‘Nike Coaching Membership’ and ‘Nike Run App’. Along with its {hardware}, Peloton’s subscription enterprise supplies a recurring income stream, and its lessons might be an awesome addition to Nike’s linked health enterprise.
Nike and Peloton have additionally beforehand collaborated on health attire in 2020. This can be a additional alternative that might be exploited if the deal occurred.
The corporate has $15.1 billion in money and money equivalents and long-term investments in Q2 of fiscal 2022, partially offset by share repurchases and dividends. Nike has the monetary means to tug off such a deal, however it could be a big acquisition and bigger than every other in its historical past.
Apple
Apple (NASDAQ: AAPL) wants little introduction as the most important firm on the earth with a market cap of roughly $2.77 trillion. It has a spread of merchandise such because the iPhone, Apple Watch and extra, together with companies.
Each Apple and Peloton are related in promoting premium {hardware} and are striving to extend their companies income. Apple has been making strides into the health market with its {hardware}, such because the Apple Watch being linked to companies like Apple Health+, which supplies health lessons. This app is one other a part of its ever-growing ecosystem and pushes into companies, and the acquisition of Peloton would complement this.
Apple has additionally been making inroads into healthcare, with CEO Tim Prepare dinner viewing this as an enormous alternative. The acquisition of Peloton might additionally make sense from this standpoint with the Apple Well being app, which supplies well being info “at your fingertips”, already having the ability to be linked with Peloton.
It additionally has no scarcity of money and money equivalents which totaled $37.1 billion as of December 2021. This massive money pile would allow it to finish an all-cash transaction with out placing an enormous dent within the steadiness sheet. Nonetheless, Apple’s largest acquisition to this point is Beats which it purchased for $3 billion, and administration might view the chance of shopping for Peloton’s faltering enterprise as too nice.
