Peloton Interactive is evaluating interest from potential suitors after a plunge in the shares of the home fitness company made it a takeover target, according to people familiar with the matter.
Suitors have not been put off by the return to gyms post-lockdown, which has left the firm worth less than a fifth of its peak $50bn valuation.
There have also been recent PR disasters when TV characters had heart attacks when using Peloton machines.
The stock rose 27% in early premarket trading in New York and could see more gains at the New York open due to high short interest. A 12% short position on its free float could mean short sellers would scramble to cover their positions, fueling shares further higher.
Peloton’s stock has fallen more than 80% from the high a year ago as the gradual easing of pandemic restrictions fueled concern that growth would slow. It’s currently valued at just over $8 billion, based on Friday’s official market close of $24.60 a share -- below its September 2019 initial public offering price of $29 a share.
Peloton sales surged during the COVID-19 pandemic as people at home during lockdowns turned to its fitness bikes and online classes for exercise. The stock lost some of its luster with the prospect of more people returning to the office.
Activist investor Blackwells Capital LLC last month issued a letter suggesting that the company fire cofounder and CEO John Foley and pursue a sale.
Blackwells said in the letter that potential buyers could include Apple Inc, Walt Disney Co and Nike.
Amazon’s interest could be linked to its effort to gain a greater role in healthcare too.