Shares of Peloton Interactive (NASDAQ: PTON) were soaring today after CNBC reported that private equity firms were considering making a buyout offer for the connected fitness company.
As of 12:48 p.m. ET, the stock was up 12.6%.
Image source: Peloton.
Is Peloton about to get a reprieve?
It's no secret that Peloton's wheels have been spinning backward ever since the pandemic lockdowns eased. The company just issued another round of layoffs and ushered out CEO Barry McCarthy, who had been brought on just two years earlier to turn the flailing business around.
Now, Peloton investors could get a bailout in the form of a private equity deal, according to CNBC.
The news network reported that several private equity firms have been considering making a play for Peloton and that the at-home fitness specialist has held talks with at least one private equity firm about going private.
At this point, Peloton's level of interest in a buyout is unclear, but the timing would seem appropriate as the company is currently without a permanent CEO, and it's been unable to mount a turnaround after more than two years of trying to rebuild momentum after the pandemic boom fizzled out.
What's next for Peloton
A buyout seems like an appealing way out for Peloton at this point. The brand has value and could fit in with a broader set of luxury brands. Whether Peloton accepts a buyout offer will be contingent on the price, but at this point it could take years for the company to recover and build a sustainably profitable business.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Peloton Interactive. The Motley Fool has a disclosure policy.
