(CTN News) _ Peloton unveiled its high-end rowing machine Tuesday. As it struggles to find its way into more friendly waters, the company faces rough currents.
The shares of (PTON) are down 70% this year. Foley and Kushi announced their departure last week.
Just seven months after Foley stepped down as CEO, (PTON) hired former Spotify (SPOT) and Netflix (NFLX) CFO Barry McCarthy.
McCarthy’s hiring was followed by more layoffs in August. It’s clear that the restructuring hasn’t worked. There may not be a solution in a $3,195 rower.
One of several pandemic era winners, is now struggling to maintain boom times. Zoom (ZM) is in the same boat. People are no longer stuck at home.
Perhaps Peloton should sell out to a larger sports/athletic company? The company wasn’t immediately available for comment.
It might make sense to merge with a sports apparel company or tech company, especially since Lululemon (LULU) acquired Mirror in 2020 for $500 million.
Nike (NKE) and Adidas (ADDDF) could be potential Peloton buyers. branded apparel collections are also available from both companies.
With the Apple (AAPL) Watch and Google-owned Fitbit, Apple (AAPL) and Alphabet (GOOGL) are already big players in fitness tech.
Peloton could easily be absorbed by both companies. In early 2021, the company’s market value reached nearly $50 billion.
Before McCarthy was hired, Nike and Amazon were mentioned as potential acquirers for Peloton.
According to Shweta Khajuria, an analyst with Evercore ISI, Peloton might not be the best takeover target just yet.
What is the turnaround time before a takeover?
According to Khajuria, McCarthy needs more time to cut costs and get back on track.
“Peloton would be an attractive acquisition target after that,” she said.
In a recent report, Goldman Sachs analysts cited Peloton as an example of a potential operational turnaround story for 2023.
It appears Wall Street is willing to give McCarthy more time to prove his subscription-based strategy will work.