Analyst: ‘Apple would be forced into it if Amazon goes after Peloton’

on Feb 7, 2022
  • Reports emerged that Amazon and Nike are interested in buying Peloton.
  • Wedbush's Ives says Peloton would be a 'golden goose' for Apple Inc.
  • Shares of the fitness equipment company are up roughly 20% on Monday.

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Peloton Interactive Inc (NASDAQ: PTON) is up 20% in the stock market today on reports that giants like Amazon and Nike are interested in buying the connected fitness company following a year-long sell-off.

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Apple might also be a contender for Peloton

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In addition to those two big names, Apple Inc (NASDAQ: AAPL) could be another “aggressive” contender for Peloton, says Wedbush Securities’ Dan Ives. On CNBC’s “Squawk on the Street”, he noted:

For Apple, this would be a golden goose type of acquisition, especially for Cook’s initiatives in fitness. It’s a huge strategic initiative from a subscriptions’ perspective. A unique brand that offers a further entry into the consumer’s living room.

The news comes weeks after activist investor Blackwells Capital said Peloton should sell itself to boost its stock price. CEO John Foley with other insiders, however, has roughly 80% of voting control at Peloton, which means such a deal is practically impossible without his approval.

Apple doesn’t want Amazon to win Peloton

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Apple is known for not spending big on acquisitions – its largest to date being Beats Electronic for $3.2 billion in 2014. Still, Ives is convinced bidding for Peloton could be both a defensive and an offensive move for the iPhone maker.

Apple would be forced into it if Amazon goes after Peloton because Amazon will get a significant leg up versus Apple in health and fitness with Peloton. That’s the defensive side. From an offensive perspective, subscriptions are key for Apple going down the road in terms of metaverse and streaming.

Also on Monday, UBS’ Arpine Kocharyan said Peloton needs to quickly rightsize its hardware business. The exercise equipment company is scheduled to report its quarterly results on Tuesday, after the bell.

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