Peloton’s prospects amid rumours of potential Nike/Amazon purchase?

[Xenia Baranova]

Continuing the discussion from today’s Watson’s Daily podcast, which company do you think is the best suited to buy Peloton? Will the purchase of Peloton solve its problems?

I agree with Peter that I think Peloton should work to secure partnerships with high-end gyms, I personally think this would work better than a purchase. It will introduce more customers to Peloton who would not have otherwise known if it is worth the hefty purchase and make Peloton more ubiquitous. The gyms could benefit by advertising their Pelotons and Peloton would benefit from the marketing of its product, in case of a further lockdown in light of a more severe coronavirus variant, more people might be encouraged to buy one.

[Andrew Spencer]

Hi Xenia

I think that Nike and Peloton would be a perfect match.

I remember Peter in the subscriber zoom call saying that Peloton’s greatest asset is their community. With Nike’s Run Club app, they have 100 million users. I think a big part of the success involves being able to create leaderboards and join virtual and in-person running events. Additionally, you can send prompts and track your friends’ progress in the app. I think this technology would work perfectly with Peloton’s existing online classes.

I also agree that a deal with gyms would benefit Peloton, especially given the strong return to gyms over the last few months. I think this would be an inexpensive option and Peleton could offer to install equipment for free to boost their profile to regular gym-goers who did not purchase their products during lockdown.

Overall, something is definitely required given Peloton’s struggles even after price reductions.

[Haamsaaveni (Hamsi) Kumar]

I definitely agree with all of the points made but at the same time, I am not sure that Peloton would enter into another partnership at the moment because (1) they have just scaled down operations and they have stated they scaled too fast with overinvestment into certain areas but also (2) that they need to do more on safety than just recalling bikes. High-end gyms would want to make sure that the bikes are 100% safe before their members do this. (3) They have also had to deal with accusations of gross mismanagement and purposely enriching themselves through its stock sales since its IPO – may hinder partnerships at the moment.

[Author]

Posts