Wedbush analyst Daniel Ives says that an Apple acquisition of beleaguered Peloton would be a “major strategic coup” and that if a rival snapped up Peloton, it would be a business-model risk for Apple’s health-care segment.
Peloton’s market capitalization has collapsed amid weak demand for its connected-fitness bikes and treadmills. The company’s stock has cratered more than 80% since early 2021, erasing some $40 billion in market value. Peloton’s market value stands at roughly $8 billion currently.
Apple’s largest acquisition to date was $3 billion for Beats Electronics in 2014. Suffice to say, Apple has scant history of making major acquisitions.
Wedbush in a note on Monday said, “we would be shocked if Apple is not aggressively involved in this potential deal process.”
Nonetheless, Wedbush analysts Dan Ives and John Katsingris wrote in a note, Peloton still has a strong brand and a loyal customer base that makes it an attractive asset for companies like Apple with others like Nike and Amazon also in the fray.
“For [Chief Executive Tim] Cook & Co, acquiring Peloton would be a major strategic coup and catalyze the company’s aggressive health and fitness initiatives over the coming years,” they wrote.
“With approximately 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 wrote. “Apple may be forced into this deal if Amazon, Nike or potentially Disney aggressively goes after Peloton in a defensive blocking strategic move,” Ives said.
MacDailyNews Take: Peloton has nothing to offer that Apple can’t do better if they so desire.
That said:
If Apple were to buy Peloton, it wouldn’t be for bikes or treadmills… If Apple were to buy Peloton, it would be for Peloton’s 2.49 million connected fitness subscribers. — MacDailyNews, January 21, 2022
If Apple acquired Peloton, they’d do so with the intention of sunsetting it and moving the Peloton subscriber base to Apple Fitness+ with Apple Watches, iPhones, iPads, and Apple TVs.
It’s just a matter of math: How much Apple figures each Peloton subscriber is worth if they move to Apple Fitness+ (plus hardware purchases that recur over time) and how many of those 2.49 million do they believe they can convert. — MacDailyNews, January 31, 2022
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