Yes. The Peloton history was bike only. App was added later as a means of growing membership (it has). Apps also has served to help existing members (e.g. when traveling w/o access to a Peloton) and expansion of product offering. This strategy has been very successful for Peloton to date. However, the company is facing a lot of challenges (e.g. competitors, bike cost, subscription pricing, etc) so they have some important strategy decisions to make.
Couldn’t find the Peloton thread as I’m in a bit of a rush but this appeared on the BBC site: Amazon and Nike exploring Peloton takeover, reports say
Something like 80% of the voting shares are still controlled by the CEO and those loyal to him…so a sale right now would have to be extremely lucrative to get them to go along.
But my Over / Under for Peloton going private again may have been optimistic…definitely bet on the under right now. 
Tomorrow’s earnings call (after the market closes) should provide some insight into where Foley’s head is at. I wouldn’t expect him to confirm/deny any specific rumors, but its possible that he discusses options based on what takes place over the next 30 hours.
As for private equity, I think that probability ranges from 0 to zero %. There’s no leverage/value added in that route for Peloton. However, all of the rumored options can bring massive leverage - Apple, Disney, Nike, and Amazon. Pending any of those scenarios showing greater life, we may see another stock uptick of 25-30%.
I’m trying to find the article I read this AM, but some analysts were poo-pooing the idea of a tech company buying them, citing regulatory concerns over Big Tech companies right now. They gave the example of Amazon trying to but MGM right now, among others.
Would seem to be a perfect fit for Nike, but some felt that fixing the issues right now could distract from their core shoe business as well.
My understanding is that Blackwell is well short of any kind of percentage to force a leadership change…only 5%. So I don’t think there is too much risk there yet, but I’ll defer to @bobmac and others on that one.
I know you asked bob, but my take is that they would see it as a boon for Fitness+, instantly giving them a massive user base that they could incoporate into their larger fitness goals. But as you note, there is a mess that needs to get sorted on the ahrdware side and that may limit the appeal.
I think this is the best Peleton ad (which should have been a blockbuster) but don’t click on the link if you’re near someone you don’t want to hear. 
Peloton advert - Falkirk - YouTube
Yes, this would be a big hurdle. There’s a formal review process, known as HSR (Hart-Scott-Rodino) conducted by the D.O.J. (I was the lead testifier for our company during our $24B acquisition in '99). Basically, it’s a consumer protection process trying to make sure that industry consolidation (as the result of the merger) doesn’t hurt competition and thus consumer purchase options, including pricing. In current times, the D.O.J. ruling is likely to be affected by congressional and public sentiment.
Here is the article I referred to earlier…
Often times disenchanted shareholders can play an important role in getting stagnant companies to do something useful to create shareholder value, such as in the 80s and 90s in the auto industry. However, in the case of Blackwell (re: Peloton), he is a minor shareholder with no value-add contributions, and as such, is no more than a noise-making, value-less trouble maker.
Personally, I don’t agree with super-majority voting structures, such as Peloton seems to have. While it perhaps has worked out so far for Google and FB, it certainly allowed Elizabeth Holmes to get herself into serious trouble (Theranos).
I agree with @Power13. In addition to the massive [highly passionate, sticky] user base, not to be underestimated is programming. Personally, I am surprised how weak Apple Fitness + is in this regard; I expected them to be a greater competitor to Peloton than they are (hence the opportunity).
On the hardware front, any Peloton inventory issue would be a round-off error in Apple’s financials (or any of the tech giants being discussed). I’m not sure what Nike would do, but I can see Apple in the connected fitness business.
We keep seeing people mention hardware. My understand was always that subscriptions were where Peloton makes money, and if I was doing any analysis on the stock purchase, I would put very little thought into how much they make selling bikes. Am I wrong here? Do you have any insight into what percentage of revenue is from subs vs hardware?
In the early days after going public, Peloton was reasonably open about revenue by source and margins. Then, during one of the earnings calls, they announced that they were going to consolidate some of the #s and would no longer be providing breakouts as they did.
My info is dated and may be incorrect as to the exact margins (perhaps @Brennus will remember), but since “day 1” of being public they have had positive gross margins even on the hardware alone roughly in the high 30s to mid-40s range. While you would think that the monthly subscription was close to 100%, it actually has some buried licensing fees (I don’t recall %) and the #s included huge amortized program development costs.
There’s lots of questions that people want to know about their business breakout, such as subscriber #s on all services, margins for each, churn on connected fitness vs standalone app, etc. Tomorrow’s 10K and earnings call (particularly Q&A) will tell us more . . . or not 
.
Purchases, no, but investments, that’s another story. How many times have they built a whole team, launched a large-scale project and disbanded the whole thing in autonomous cars so far?
This said - all of these (Apple, Amazon, …) are looking at ways to monetize the gigantic customer bases and associated data they own. Fitness is a relatively small, but still attractive way to do some of that.
This is what is known as ‘fomenting’. Some managers are holding large PTON pos’ns…it’s getting to be EOQ…it would be nice to have a +ive liquidity event to get out of some of that pos’n.
Peloton is out of the league for Garmin ($25B mkt cap; probably cost them 40% of the company) if that is what you are thinking. It also wouldn’t fit their more conservative brand.
Personally, I think the fitness category is much larger than one might think as it is tightly coupled to lifestyle (think of Peloton’s apparel business for example). It’s one of the reasons it may be a good fit even for Nike.
Some huge moves happening. Todays call should be…interesting.
Yeah, that isn’t good when they make moves like that before an quarterly call.
But in order to meet that surge in demand, Foley over invested and Peloton was left with a bloated cost structure that it must now restructure in order for the business to survive.
And this is exactly why a lot of companies in the bike industry did not expand their production capacities much beyond adding extra shifts, etc. When you invest in actual infrastructure and that incremental demand wanes, you are screwed.
COVID was a bubble, not a boom and the market is correcting itself.
Foley gone as CEO. Gonna get ugly.
From the article:
Peloton announced sweeping cuts to its workforce and manufacturing ambitions. It said it would reduce corporate positions by 20 per cent and “wind down” a planned $400mn investment in a 1mn sq ft factory in Ohio. Foley had only broken ground on the plant in Troy Township in August, promising that it would bring more than 2,000 jobs to the area and give Peloton “a massive strategic lever” to ensure it could meet demand for years to come. The strategic reversal will cost $130mn in cash charges and $80mn in non-cash charges, Peloton said, while cutting $150mn from this year’s capital spending and yielding “at least $800mn in annual run-rate cost savings”.