Why Peloton Stock Is Up By 20% Today

Peloton Stock Rallies On Takeover Reports

Shares of Peloton  rallied after a WSJ report indicated that Amazon was thinking about buying the company, while a FT report highlighted Nike as another potential bidder. Apple has also been mentioned by analysts as a potential suitor.

Peloton stock is down by more than 80% from its highs that were reached back in 2022, and a potential deal looks like a way out of the current situation.

The market doubts whether the company will be able to grow at a healthy pace after its initial success. The potential acquisition makes strategic sense for Peloton as support from one of the world’s leading companies can boost its business.

What’s Next For Peloton Stock?

Analysts expect that Petloton will report a loss of $2.91 per share in the current fiscal year and a loss of $1.03 per share in the next fiscal year, but traders will likely ignore financial forecasts in the upcoming trading sessions and focus on the potential competition between suitors.

Adding to volatility, Peloton is set to release its second quarter fiscal 2022 results on February 8, after the market close. In case the company fails to reach a deal before the release of the earnings report, it will not provide commentary on the recent rumors.

The key question for traders is whether potential suitors are ready to pay a material premium for Peloton stock. Sometimes, this premium is not that big, as higlighted by today’s deal between Frontier and Spirit Airlines (SPR is up by just 14% in today’s trading session).

In case the big companies are highly interested in buying Peloton, the company’s stock may move higher as competition between bidders intensifies and more rumors emerge. However, traders should be careful as no deal is guaranteed, and suitors may have the intention to grab Peloton on the cheap due to the company’s recent problems.

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