The company’s exercise bikes were a huge hit early in the pandemic. Now, it’s struggling to maintain its growth as people spend more time outside their homes — and would-be buyers are circling.

What’s happening

Peloton’s stock is up 32% in premarket trading on Monday following reports that Amazon and Nike are exploring bids for the company. One analyst has also suggested Apple as a possible suitor.

“We would be shocked if Apple is not aggressively involved in this potential deal process,” Wedbush Securities analyst Dan Ives said over the weekend.

Quick rewind

Plenty of firms clearly smell a deal. Peloton’s shares have plunged more than 80% from their high in January 2021. They’ve come under renewed pressure in recent weeks following a report that the company had stopped manufacturing new bikes and treadmills.

Investor tells Peloton to fire CEO, explore putting company up for sale

CEO John Foley has denied this, but said Peloton is “resetting” production levels as it adapts to more “seasonal demand curves.” He acknowledged the need to slash costs, and said the company is “considering all options as part of our efforts to make our business more flexible,” including layoffs.

Blackwells Capital has a different idea. The activist investor recently said it has “grave concerns” about Peloton’s performance and is calling on its board of directors to fire Foley and explore a sale.

The case for Amazon

Multiple news outlets have said Amazon is interested. The online retailer has started ramping up its health and wellness offerings, launching the wearable Halo fitness tracker in 2020.

But it could be an awkward fit, according to Cowen analyst John Blackledge, who noted on Monday that Amazon “typically sells mass market products [and] services,” while Peloton — whose entry-level bike costs $1,495 — is more of a “premium” brand.

The case for Nike

The Financial Times reports that the apparel giant weighed an offer for Peloton before it went public in 2019, but ultimately decided not to proceed. Could it take another look now?

Maybe. But Nike has been focusing on its digital strategy. In December, it bought RTFKT, which makes non-fungible tokens, or NFTs, of collectibles and memes. And acquiring Peloton, which requires building complex machines, could add to the supply chain headaches that have been dogging the company.

The case for Apple

Apple took on Peloton in 2020 with the launch of its subscription service Fitness+, which is compatible with the Apple Watch. But Ives thinks joining forces would be a smart move, since it would rapidly ramp up Apple’s customer base in this category and “catalyze the company’s aggressive health and fitness initiatives.”

Apple has been shy about making flashy acquisitions. Its last high-profile deal was for Beats in 2014, which had a price tag of $3 billion. But it’s sitting on plenty of cash, should it be tempted.

Maybe no one wins

Blackledge at Cowen thinks it’s “unlikely” that a Peloton sale will come together in the end, pointing out that the company’s share structure means that insiders including Foley have a vise grip on the firm.

“We expect they are likely to continue to pursue the company’s long-term strategy independently, at least for the foreseeable future,” Blackledge wrote.

Coming up

Attention will be on Foley when the company reports results from its latest quarter on Tuesday. Will he address deal chatter?