Peloton Interactive (NASDAQ:PTON) Inc, the maker of the once trendy expensive fitness machines, is reportedly looking to sell a large stake in the company.
The Bloomberg news agency said the hope is that a backer with deep pockets will agree to take a stake of around 20% in the struggling firm.
The search for a backer is said to be at an early stage, according to an unnamed source.
The company was riding high during lockdown as fitness fanatics and those who imagined they would become fitness fanatics bought the company’s stationary exercise bikes so they could cycle for hours without going anywhere while being shouted out by a hyper-enthusiastic American coach.
In the UK, the bikes retailed at a minimum of £1,550, on top of which owners could subscribe to networked exercise sessions at a cost of £39 a month.
With the pandemic starting to take hold in the West circa February 2020, in May of that year Peloton reported a 66% year-on-year increase in sales and a 94% rise in subscribers. By September 2020, it was actually turning a profit, with sales up 172% from a year earlier in the third quarter.
The craze did not last, however, partly because the company could not keep up with demand and struggled to maintain quality control, resulting in a product recall of 30,000 bikes. In 2021, the company was bounced into issuing a recall of its Tread+ treadmill product after a child died as a result of being dragged under the rear of the treadmill.
The company’s stock market valuation fell from around US$50bn to around US$5.6bn currently. The shares, which were floated at US$29, now trade at US$17.
In February of this year, the company announced that around 20% of staff members would be asked to get on their bikes and search for a new job and it replaced its chief executive officer.
The company is scheduled to release a quarterly earnings update on 10 May.