Apple's acquisition of Peloton would be a 'major strategic coup' for the company, according to Wedbush analyst Daniel Ives. Peloton's stock has tumbled down over 80% from pandemic highs amidst bad publicity and slowing sales.
With media reports swirling that Peloton could be up for sale with Amazon and Nike potential suitors, we would be shocked if Apple is not aggressively involved in this potential deal process. With Peloton stock down 80%+ from pandemic highs on the heels of demand/growth concerns, WFH waning, and a handful of execution issues (treadmill debacle), we believe there will be a handful of technology and consumer brand stalwarts circling for a potential bid with activists also pushing a sale. For Cook & Co, acquiring Peloton would be a major strategic coup and catalyze the company's aggressive health and fitness initiatives over the coming years. With ~2.8 million paid subscriptions today and a very strong/unique competitive moat, Apple acquiring Peloton would be both an offensive and defensive acquisition in our opinion.
Ives says an acquisition would make sense for numerous companies including Disney, Nike, Amazon, or Apple. On the defensive front, if Apple lets another stalwart get their hands on Peloton, it could affect the prospects of Apple Fitness+. On the offensive front, Apple could use Peloton's services and products to bulk up its health initiatives.
Wedbush believes Peloton could be acquired for around $12-15 billion and easily fit into Apple's ecosystem.
We believe Peloton is a unique asset that would fit well into Apple's golden consumer ecosystem which makes us believe Cupertino could be a real bidder for this asset. Importantly, Apple may be forced into this deal if Amazon, Nike, or potentially Disney aggressively goes after Peloton in a defensive blocking strategic move.
