The sale of the company was instigated two weeks ago by activist investor Blackwells Capital, which urged in an open letter that the board of the company sack its cofounder and chief executive, John Foley, and explore a sale. The interest from Amazon and Nike was first reported by the Wall Street Journal and then followed up by the Financial Times and Bloomberg. 

Blackwells said the company should consider potential buyers in the technology, streaming, metaverse, and sportswear industries, naming Apple, Walt Disney, and Nike as potential buyers. It added that an acquisition of Peloton was opportunistic given the company’s market capitalization collapse from around $50 billion a year ago to less than $8 billion this week. Even after today’s surge, Peloton’s shares are down almost 80% from their December 2020 peak.

Today, Peloton is bouncing around its September 2019 IPO price and continues to be bogged down by bad press. Here is the history of how we got here. 

Warm up

Peloton saw steady growth before the pandemic and floated successfully in September 2019 at $29 a share. When COVID-19 hit and restrictions came into place, the company, which provided a clear solution to closed gyms and widening waistlines, experienced skyrocketing consumer demand and surging sales.

By mid-2021, Peloton had 5.9 million subscribers and annual revenues of $4 billion. At its peak, Peloton had a market valuation around $50 billion.

The rapid increase in demand was so great the company was reporting supply delays, with deliveries taking months. Faced with this threat to the company’s growth, Peloton doubled down and invested $100 million in February 2021 to speed up shipping and ease supply constraints.

Despite consumer anger over delivery delays, Peloton’s string of bad news didn’t really begin until May 2021, when it recalled its line of treadmills after dozens of injury complaints and the death of a child. The recall came after Peloton had spent weeks dismissing the need to do so.

But even after the death of a child, Peloton’s share price only faltered around 4%. 

Cool down…and heart attacks

Peloton’s luck turned in November 2021, when the company slashed its full-year sales forecast by up to $1 billion, citing a drop in demand for its exercise bikes and treadmills as people returned to pre-pandemic habits and gyms.

“It is clear that we underestimated the reopening impact on our company and the overall industry,” CFO Jill Woodworth said on a post-earnings call at the time. Following the news, shares dove 31%.

A month later, Peloton suffered a (fictional) heart attack. On the Sex and the City reboot, And Just Like That…, Mr. Big dropped dead of a heart attack after a 45-minute ride in the first episode, which aired on Dec. 9, 2021. At the time, Peloton said it didn’t know its product would be used to kill off a character. But that didn’t stop shares from sliding 11% and BMO Capital Markets analyst Simeon Siegel noting that Peloton had “lost control over its storytelling.” 

Peloton scrambled and whipped together a 37-second ad in 48 hours, featuring Chris Noth, who plays Mr. Big, with Peloton instructor Jess King. They discuss riding the Peloton in a brief conversation with heavy sexual overtones, while Ryan Reynolds says in voice-over that regular cycling improves circulation and reduces the risk of cardiovascular disease.

It was a good try. But three days later Peloton had to remove the ad from the web, after two women alleged Noth had sexually assaulted them, according to The Hollywood Reporter. 

As soon as the Mr.Big headache ceased, another report battered the company’s stock. This time, CNBC said it had received internal Peloton documents that showed the company was suspending production for several of its at-home fitness products for six weeks until consumer demand picked back up. Peloton shares fell by 24% on Jan. 21, 2022, to $24.22, erasing another $2.5 billion from the company’s market capitalization.

In a blog post the day after, company CEO John Foley denied the details of CNBC’s report and announced that the firm had “identified a leaker” responsible for passing the confidential information to the media outlet.

Then came another (fake) heart attack. This time it was Wags—a character played by David Costabile on Showtime’s Billions. In the second heart attack, Wags survives the experience.

Peloton’s marketing team tried to put on an optimistic front, noting the Billions episode mentioned the health benefits of a good workout. “As referenced by the show itself, there are strong benefits of cardiovascular exercise to help people lead long, happy lives,” Peloton said.

The company’s problems led Blackwells Capital, which owns less than 5% of Peloton, to accuse Foley of mismanagement, misleading investors, and hiring his wife in an executive role—decisions that the hedge fund claimed cost $40 billion in shareholders’ wealth.

Those issues may soon be Nike’s or Amazon’s problem. 

Peloton reports its second-quarter earnings on Feb. 8. Peloton did not reply to a request for comment.