Beleaguered at-home fitness brand Peloton Interactive, Inc. (NASDAQ:PTON) is looking for a lifeline to rescue it from a troublesome situation.
What Happened: Peloton is seeking to sell a minority stake of 15% to 20% to potential investors from among peers and private-equity partners, the Wall Street Journal reported, citing people familiar with the matter.
If the company manages to rope in big industry players such as Amazon, Inc. (NASDAQ:AMZN) or an established private-equity firm, it could be seen as a "vote of confidence" for the business, WSJ noted.
Why It's Important: Peloton emerged as a major COVID-19 play, as its exercise equipment and virtual classes saw significant demand amid the stay-at-home setting necessitated by the pandemic. Once the pandemic situation improved, the company began to see a steep drop in demand for its product and services. It was also left to contend with tough comparisons.
Related Link: Does A Potential Peloton Acquisition Make Strategic Sense For Apple?
Amid the fundamental woes in a post-pandemic economy, the company replaced its CEO John Foley in early February.
Peloton shelved a $400 million manufacturing facility under construction in Ohio and announced several other cost-cutting initiatives, including workforce reduction. The company also lowered its forecast for the fiscal year 2022.
Peloton stock is now a pale shadow of its old self. From a pandemic high of $171.09, the stock is currently trading at high-teens levels. The stock closed Thursday's session down 9.09% at $17.01, according to Benzinga Pro data.
Related Link: Why Apple's Business Model Won't Work For Peloton And How The Fitness Company Can Turnaround Its Business
Photo: Courtesy of Peloton
