One-time pandemic darling Peloton (PTON) has seen its fortunes collapse as Americans have returned to more normal living and working patterns.
For a while the high-tech bikes, which feature interactive video screens and virtual classes, were all the rage. Homebound athletes seeking to maintain their exercise routines and relieve some of the pandemic's stress bought them in droves.
But as life returned to somewhat more normal existence, sales of the pricey gadgets fell sharply. And with the sales slide, shares fell as well, tumbling nearly 90% from their peak.
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Recently Peloton announced it was halting production of the bikes altogether, at least temporarily.
Activist investors have gotten involved, pushing for a sale or partnership and late Friday, a report said that Amazon.com (AMZN) has been speaking with advisers about possibly acquiring the company.
The Wall Street Journal reported that no deal was imminent or certain. In addition, it said other suitors are circling as well.
What's Next?
Dan Kline writes in Peloton's Surprise Move May Kill Its 2022 Comeback Efforts, "The return to the gym as well as the pull-forward of its demand made a slowdown inevitable for Peloton. Management, however, compounded the issue by making a series of questionable moves."
While sale of high-margin bike equipment may no longer be part of the business model, Peloton does enjoy an established user base of close to 6 million riders affluent enough to have bought a piece of exercise equipment that cost $2,245 at the start of the pandemic. (Price cuts have since knocked that down to $1,495.) Some observers have suggested the company could switch to virtual reality glasses that would allow users to ride through virtual worlds.
Peloton, which once carried a market cap of $50 billion, closed at $24.60. It came public in September, 2019 at $29.
After the close and Friday's report, shares surged in after-hours trading. Shares gained $7.15, or 29%, to $31.75.
Amazon, which reported better-than-expected results Thursday, saw its shares close up $375.88, or 13.5% at $3,152.79 on Friday.
