Topline
Shares of at-home spin class company Peloton spiked 15% Tuesday morning, the company’s best day on Wall Street in over four months, following a report that a group of private equity firms are mulling a buyout of the company, which has struggled with floundering sales, layoffs and recalls since a pandemic-era boom.
Peloton's shares surged Tuesday morning amid buyout speculation.
Key Facts
CNBC reported several unnamed private equity firms are considering a buyout, citing unnamed sources, potentially providing a jolt to the company after 13 consecutive quarters of financial losses.
At least one of those firms has been in conversations with Peloton in recent months, as the company considers a pivot to go private, CNBC reported, though sources added other firms are also considering a buyout.
Shares jumped around 15% Tuesday morning to a one-month high of over $4 per share, marking its best day since early January, when its shares surged nearly 14% after it announced a partnership with TikTok on a fitness content program.
Peloton told Forbes it does not comment on “speculation or rumors.”
Key Background
Peloton was founded in 2012, providing an at-home alternative to spin classes, with users able to tune in to live or pre-recorded classes for a monthly subscription. The company’s share price skyrocketed in the early months of the COVID-19 pandemic, as gyms and wellness centers were shuttered by capacity restrictions and consumers turned instead to workouts at home. Its stock price peaked in December 2020 at nearly $163 per share, though in the months that followed, investors slowly started losing faith in the company amid slumping sales as users returned to the gym. That sales slump coincided with multiple rounds of layoffs, as well as several recalls, including one last May affecting 2.2 million bikes that led to a 7% drop in its stock.
Tangent
Peloton conducted its latest round of job cuts last week, laying off 15% of its global workforce, or roughly 400 employees, as part of a cost-cutting initiative intended to save over $200 million per year in spending by the end of the 2025 fiscal year. Peloton also announced last week its CEO Barry McCarthy would be stepping down from the company. McCarthy said he will continue to serve as a strategic advisor for the New York-based company through the end of the year, with company chair Karen Boone and Chris Bruzzo stepping in as interim co-CEOs.
