n some respects, it seems strange that companies known for their innovative technologies are considering buying Peloton. But taking a step back, I can see the logic.
“It’s been reported that Amazon.com and Nike are weighing bids for Peloton Interactive . One analyst said he’s be surprised if Apple also wasn’t in the mix,” writes Joe Woelfel of Barron’s. “Peloton stock, which has fallen 83% in the past 12 months, surged 26.4% to $31.10 in after-hours trading Friday. In 2020, amid surging demand for Peloton’s bikes during lockdowns, the stock soared to above $160. But the shares have tumbled as gyms reopened. It has declined 31% year to date.”
In light of those bleak numbers, it’s not surprising that speculation about Peloton’s fate is rampant. “Last month, activist investor Blackwells Capital said it sent a letter to Peloton’s board suggesting the company fire CEO John Foley and explore a sale,” writes Woelfel.
You can certainly argue that Amazon and Apple have evolved way past their tech roots and become fully-fledged consumer brands. But would acquiring Peloton really help either company achieve its strategic goals? Or would it be a step toward becoming some sort of modern-day conglomerate?
Following in the footsteps of companies like GE and AT&T might have seemed like a good idea back in the 20th century. But with the wisdom of hindsight, we can say that both companies went too far with their acquisition strategies. It’s hard to say when “big” becomes “too big,” but the textbooks are full of cautionary tales of spending sprees that don’t pan out.
You also need to consider the shifting sentiments of investors. “The stock market’s popular FAANG trade is starting to show cracks,” writes Gunjan Banerji of The Wall Street Journal. “Investors say they are reconsidering their approach to trading big technology stocks after a week marked by giant swings in share prices. They are more closely sifting through the winners and losers to try to identify those that might thrive over the next year.”
Given all that’s going on right now, I’d let the Peloton opportunity ride for a while. What’s your opinion? Contact us a info@hmstrategy.com and let us know what you think.
At HMG Strategy, our goal is preparing you for the unlimited future. Everything we do here supports our fundamental mission of helping you accelerate your career ascent. Our truly unique and powerful platform enables you to acquire knowledge from the top-tier thought leaders and practitioners, to meet and mingle with your peers, and to hear the latest news about the newest technologies from trusted sources.
HMG Strategy is the world’s largest independent global platform for technology leaders, with a growing network of over 400,000 technology executives. Our global, social and digital platform has expanded significantly, and we welcome you to visit the HMG Strategy Resource Center to learn directly from the most innovative leaders of our time.
