Big Tech wants to buy Peloton. Here’s who should do it.

Peloton makes good hardware and immersive content, and it desperately needs help managing it all.

A Peloton

Lots of people own Peloton products. But who will own Peloton?

Photo: Peloton

More than one company is reportedly interested in buying Peloton. Is Peloton actually for sale? That’s not yet clear. But this much is: Peloton’s stock is down more than 80% over the last year, it has run into a series of problems with its products and it seems to be a company in disarray. It was a $50 billion company a couple of years ago, and its market cap has dropped to about $7.5 billion. And that’s after a big jump that came from the acquisition rumors.

Blackwells Capital, a large shareholder in Peloton, sent the company a scathing letter a couple of weeks ago detailing what the firm sees as Peloton’s major recent missteps. “With the stock now trading below the IPO price,” Blackwells wrote, “and down more than 80% from its high, it is clear that the Company, the executives and the Board have squandered this opportunity.”

Among the accusations levied at Peloton:

  • Bad leadership from CEO John Foley, who sold a lot of his shares in the company and seemingly couldn’t make up his mind about the company’s direction.
  • Mismanaging its supply chain, such that it ended up with products needing to be recalled and then a huge glut of inventory.
  • Overpaying for a huge New York City office.

Blackwells included a list of companies — Apple, Disney, Sony, Nike, plus “any number of technology, streaming, metaverse and sportswear companies” — that might be better stewards of Peloton than Peloton. And it gave the company a bit of a backhanded compliment: “Despite the incontrovertible mismanagement of the Company, Peloton has a large and loyal customer base, skilled employees, great technology and content, and a respected brand.”

Again, it’s not yet clear that Peloton is for sale. But it looks like Blackwells is going to get one of its primary demands: Foley is planning to step down, The Wall Street Journal reported, to be replaced by former Spotify and Netflix exec Barry McCarthy. Without Foley in the picture, a sale of the company could happen more easily.

Amazon and Nike are both reportedly interested, and Apple and others have been named as possible suitors as well. Each of those companies makes sense as a possible acquirer, though not always for the same reasons.

Here’s what Peloton could bring to some of its potential suitors, and what those companies might get for their billions. Let’s start with the three names seemingly on everyone’s mind.

If Amazon buys Peloton

What Amazon gets: A flagship product for its growing health ecosystem, which currently includes products like the Halo wristband and projects like Amazon Care, its telehealth system. Peloton is a longtime high-profile AWS customer, and could be a way for Amazon to show off more of its cloud-computing capabilities. Could a Peloton subscription be a benefit for Prime subscribers, even the ones who don’t own a bike or treadmill?

What Peloton gets: Access to Amazon’s unparalleled logistics network, which could make delivery and maintenance of those huge treadmills and bikes a lot easier. Lots of access to AWS, Alexa and other Amazon projects you could imagine Peloton might use. An owner with limitless resources and a solid reputation for helping its portfolio succeed.

Our take: Amazon stands to gain a lot here, including a huge stationary device and large screen in millions of homes that could run Alexa. It would also get a fitness brand, and provider of health data, that Halo isn’t likely to achieve anytime soon. The upsides are less enticing for Peloton, except that Amazon does have a good reputation for bringing companies in — like Ring and Eero — and helping them succeed.

If Apple buys Peloton

What Apple gets: Tight integration with Peloton instantly becomes a selling point for the Apple Watch and the Fitness+ platform. Lots of data for Apple Health and its other health initiatives. A new line of high-end hardware.

What Peloton gets: Bikes and treadmills in prominent places in one of the best retail ecosystems in the world. Access to the industry’s best supply chain, Apple’s impressive chip business and all the data-privacy features Apple’s been building in recent years.

Our take: This one’s probably better for Peloton than Apple. An Apple acquisition would give Peloton a boost in almost every way, but it’s not clear that Apple needs more access to high-end users or a quick bounce in subscriber numbers. And it definitely doesn’t need the branding win.

If Nike buys Peloton

What Nike gets: The kind of hardware prowess it has repeatedly tried and failed to build internally. (Remember the FuelBand?) Products that could make the Nike Training Club ecosystem more useful and powerful. Lots of captivated, wealthy customers to buy Nike-branded fitness gear.

What Peloton gets: Access to Nike-sponsored athletes, its legendary marketing machine and high-end fitness brand. Nike could help Peloton go from “bike company” to lifestyle brand, which it clearly wants to be.

Our take: This one makes the most sense for all sides. Nike needs a hardware player, especially as its competitors build out ecosystems like Lululemon did by buying Mirror and Apple launching Fitness+. And the overlap of “people who own Pelotons” and “people who buy expensive Nike gear” is practically a single circle.

What about the metaverse?

Blackwells’ ideas for possible Peloton suitors mostly make a certain amount of obvious sense. It’s fairly easy to imagine how any apparel maker, content company or general tech giant might make use of Peloton’s brand, content and technology.

But the mention of metaverse companies, and the inclusion of Disney and Sony as possible buyers, is an interesting one. You could make the case that Peloton is, in some ways, ahead of the metaverse curve: It uses a combination of hardware and software to build experiences that are both personalized and collaborative. Add a camera into the mix — like the one Peloton is already working on — and give users headsets, and every rider could be a digital avatar in a virtual Peloton studio.

Of course, “metaverse” is the buzziest of buzzwords right now, and Blackwells could be hoping for the company to get a bit of a metaverse boost. But Peloton is already an immersive content company, maybe even more than it is a maker of bikes and treadmills. And that could make it enticing to far more buyers going forward.

Does anybody need Peloton?

That’s the real question. Peloton may have been early to the connected fitness game, and remains the industry’s biggest name, but competitors are hitting it from all sides. Tonal, Hydrow and others are building their own in-home exercise systems, while Apple, Nike and others are building their own libraries of exercise content. Meanwhile, people are going back to the gym, and some gyms are investing in their own apps and at-home workout experiences. There’s not much about Peloton that is utterly unique anymore — unless you count Cody, anyway.

The question for Amazon, Apple, Nike and others will be whether they feel they can beat Peloton at its own game, or if it’s worth $10 billion or so to take a shortcut to the top of the market. If Peloton can turn its fortunes around, it might even have a chance to compete on its own. But it won’t have that chance for long.

Update: This story was updated to include Peloton CEO John Foley's plan to step down. Updated Feb. 8.


Why foundation models in AI need to be released responsibly

Foundation models like GPT-3 and DALL-E are changing AI forever. We urgently need to develop community norms that guarantee research access and help guide the future of AI responsibly.

Releasing new foundation models doesn’t have to be an all or nothing proposition.

Illustration: sorbetto/DigitalVision Vectors

Percy Liang is director of the Center for Research on Foundation Models, a faculty affiliate at the Stanford Institute for Human-Centered AI and an associate professor of Computer Science at Stanford University.

Humans are not very good at forecasting the future, especially when it comes to technology.

Keep Reading Show less
Percy Liang
Percy Liang is Director of the Center for Research on Foundation Models, a Faculty Affiliate at the Stanford Institute for Human-Centered AI, and an Associate Professor of Computer Science at Stanford University.

Every day, millions of us press the “order” button on our favorite coffee store's mobile application: Our chosen brew will be on the counter when we arrive. It’s a personalized, seamless experience that we have all come to expect. What we don’t know is what’s happening behind the scenes. The mobile application is sourcing data from a database that stores information about each customer and what their favorite coffee drinks are. It is also leveraging event-streaming data in real time to ensure the ingredients for your personal coffee are in supply at your local store.

Applications like this power our daily lives, and if they can’t access massive amounts of data stored in a database as well as stream data “in motion” instantaneously, you — and millions of customers — won’t have these in-the-moment experiences.

Keep Reading Show less
Jennifer Goforth Gregory
Jennifer Goforth Gregory has worked in the B2B technology industry for over 20 years. As a freelance writer she writes for top technology brands, including IBM, HPE, Adobe, AT&T, Verizon, Epson, Oracle, Intel and Square. She specializes in a wide range of technology, such as AI, IoT, cloud, cybersecurity, and CX. Jennifer also wrote a bestselling book The Freelance Content Marketing Writer to help other writers launch a high earning freelance business.

The West’s drought could bring about a data center reckoning

When it comes to water use, data centers are the tech industry’s secret water hogs — and they could soon come under increased scrutiny.

Lake Mead, North America's largest artificial reservoir, has dropped to about 1,052 feet above sea level, the lowest it's been since being filled in 1937.

Photo: Mario Tama/Getty Images

The West is parched, and getting more so by the day. Lake Mead — the country’s largest reservoir — is nearing “dead pool” levels, meaning it may soon be too low to flow downstream. The entirety of the Four Corners plus California is mired in megadrought.

Amid this desiccation, hundreds of the country’s data centers use vast amounts of water to hum along. Dozens cluster around major metro centers, including those with mandatory or voluntary water restrictions in place to curtail residential and agricultural use.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).


Indeed is hiring 4,000 workers despite industry layoffs

Indeed’s new CPO, Priscilla Koranteng, spoke to Protocol about her first 100 days in the role and the changing nature of HR.

"[Y]ou are serving the people. And everything that's happening around us in the world is … impacting their professional lives."

Image: Protocol

Priscilla Koranteng's plans are ambitious. Koranteng, who was appointed chief people officer of Indeed in June, has already enhanced the company’s abortion travel policies and reinforced its goal to hire 4,000 people in 2022.

She’s joined the HR tech company in a time when many other tech companies are enacting layoffs and cutbacks, but said she sees this precarious time as an opportunity for growth companies to really get ahead. Koranteng, who comes from an HR and diversity VP role at Kellogg, is working on embedding her hybrid set of expertise in her new role at Indeed.

Keep Reading Show less
Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.


New Jersey could become an ocean energy hub

A first-in-the-nation bill would support wave and tidal energy as a way to meet the Garden State's climate goals.

Technological challenges mean wave and tidal power remain generally more expensive than their other renewable counterparts. But government support could help spur more innovation that brings down cost.

Photo: Jeremy Bishop via Unsplash

Move over, solar and wind. There’s a new kid on the renewable energy block: waves and tides.

Harnessing the ocean’s power is still in its early stages, but the industry is poised for a big legislative boost, with the potential for real investment down the line.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Latest Stories