Rumors swirled over the weekend that Peloton, the luxury exercise company, was going out of business after one of the company’s main investors said Peloton should consider selling. According to ABC News, Amazon and Nike are reportedly interested in purchasing the exercise bike maker but have yet to begin talks.

The company earned a market capitalization of nearly $52 billion during the Covid-19 pandemic, but demand for expensive home exercise equipment fell tremendously once lockdown measures came to an end. By November 2021, the previous market cap plummeted down to $8 billion.

Blackwells Capital, one of Peloton’s largest investors on the board, also called on the company to remove CEO John Foley, who has been generating bad press for Peloton since mid-2021. He was replaced immediately on Tuesday.

Amid numerous investigations by the Department of Justice into the safety of their treadmills, Peloton’s stock price was in a long downward spiral due to Foley’s mismanagement, according to Blackwells Capital. The investment group blamed Foley for having too large of an inventory, committing to a massive 300,000-square-foot, 20-year lease for office space in New York, misleading investors, and hiring his wife as a key executive, ABC News reported.

John Foley also tanked employee morale after a company-wide Christmas party was canceled and a more-exclusive event was later held for Foley and some of the company’s elite personal trainers.

The exercise company was also blasted by bad press from popular television shows, after a major character on HBO’s Sex and the City reboot And Just Like That… died on a Peloton bike after suffering from cardiac arrest. Another incident occurred on the Showtime series Billions, which also mocked the writing coincidence with And Just Like That…

In an attempt to clear their name, Peloton had And Just Like That… actor Chris Noth appear in one of their commercials but had to quickly halt the ad after Noth was accused of sexual misconduct bu multiple women. In recent months, the company stopped production of new bikes and treadmills entirely.

“I love Peloton,” Foley said, adding that “missteps” were made “too rapidly” and that he’s “holding ourselves accountable.”

On Tuesday, Peloton replaced Foley and appointed a new CEO. Barry McCarthy, the former chief financial officer for Spotify and Netflix, took the helm. The exercise company also announced that it would be scaling back production and laying off over 2,800 employees, including 20% of corporate positions.

“Now that the reset button has been pushed, the challenge ahead of us is this… do we squander the opportunity in front of us or do we engineer the great comeback story of the post-Covid era?” Barry McCarthy wrote in an internal email for Peloton staffers.

Referring to the layoffs, he acknowledged that the “restructuring news has been difficult,” but stated that “either revenue had to grow faster, or spending had to shrink. The math simply didn’t work otherwise, and the status quo was unsustainable.”

John Foley ousted on Tuesday as CEO of Peloton for mismanaging the company
John Foley ousted on Tuesday as CEO of Peloton for mismanaging the company. Photo Credit: Shutterstock

According to a source from Amazon, ABC News reported that the shipping giant is currently in talks with advisors about an offer for Peloton, as is the sportswear company Nike.

Blackwells Capital allegedly suggested that the board sell to Apple, but many analysts believe that the tech giant would never spend so much for something that’s losing money.

Most of Apple’s acquisitions have come from improving its own technology by buying little startups (such as a company called Dark Sky which improved their iPhone Weather App), which is a practice known as “acquihires.”

The largest acquisition for Apple was when it purchased Beats Headphones for $3 billion, but Peloton will likely sell for around $12 billion if the market goes up a bit now that McCarthy is attempting to right the ship.