Amazon is named as a potential buyer of Peloton in a suspiciously well-timed rumor

The Wall Street Journal reported on Friday that Peloton is drawing interest from potential suitors, including Amazon.

The shares of the maker of at-home exercise bikes rose 40% in extended trading Friday.

In the meantime, the Financial Times reported late on Friday that Nike was evaluating a bid for Peloton, citing people briefed on the matter who said the considerations were preliminary and Nike hadn’t held any talks with Peloton.

Blackwells Capital called on Peloton’s board last month to remove the company’s CEO, John Foley, and put the company up for sale.

Peloton’s success surged during the pandemic while gyms were closed, attracted a well-off clientele who could shell out thousands for its signature stationary bike and live-streamed workouts. (The bikes start at $1,495, while the newest model costs $2,495.)

After a wave of negative press and as gyms reopen, Peloton has struggled to maintain its numbers. Competition from less expensive bike models is evident, especially since users can pair them with the Peloton app. In May, the company recalled its two popular treadmills after dozens of reported injuries and a child’s death.

Since November, when it hinted that demand for exercise bikes and treadmills was slowing faster than expected, the company has lost about $20 billion in value. The company’s market value has dropped to about $8bn from its high of $50bn last year.

Peloton may lay off employees to recover lost revenue. “We now need to evaluate our organization structure and size of our team, with the utmost care and compassion,” John Foley, Peloton’s co-founder and chief executive, wrote in January. “And we are still in the process of considering all options as part of our efforts to make our business more flexible.”

According to the Wall Street Journal report, Amazon has been speaking to advisers about a potential deal. However, there was no guarantee the e-commerce giant will follow through with an offer or that Peloton would be receptive, it added.

Peloton could be an appealing opportunity for Amazon to expand its health and wellness presence. In 2020, the online retailer made its first major play in the wellness hardware market by launching its Halo band, which tracks users’ exercise and sleep.

Acquiring Peloton could be financially in reach for Amazon, which reported stellar quarterly profits of $14.32bn on Thursday. Amazon’s biggest acquisition to date was grocery chain Whole Foods, which it snapped up for $13.7bn in 2017.