What's going on?

Reports emerged over the weekend that Amazon and Nike both want to buy fitness company Peloton, and they�re already squeezing into leggings for their head-to-head.

What does this mean?

Peloton was in the best shape of its life in the depths of the pandemic, with its valuation hitting a nearly $50 billion high as recently as a year ago. But post-lockdown freedom has taken its toll on the company, whose stock has now fallen over 80% since those heady days. That puts Peloton at a valuation of just under $8 billion.

Cue Amazon and Nike, two companies with an eye for a bargain. The Everything Store might see Peloton as a good fit as it continues to expand into the health and wellness space, not to mention allow it to market its products to Peloton�s almost 3 million subscribers. Nike, meanwhile, might simply want to build out its already extensive fitness community � and kit out Peloton�s instructors head to toe in swooshes, of course.

Why should I care?

For markets: Undo! Undo!
Peloton�s stock jumped over 30% after the reports surfaced, and a �short squeeze� could push it higher still. See, 12% of all Peloton�s stock is currently being �shorted�, meaning some investors are selling its shares to others in hopes of buying them back at a lower price later on. In other words, they�re betting Peloton�s share price will fall. But now that their bet�s being proved wrong, those �short sellers� might buy the shares back before their losses climb even higher � a move that�ll push Peloton�s stock up even more.

The bigger picture: Is Apple next?
Some analysts think Apple � which has a pile of cash burning a hole in its pocket � might want to bolster its own fitness subscription business by buying Peloton too. But there�s one flaw with that theory: Peloton�s weighty exercise equipment doesn�t fit with Apple�s notorious strategy of urging customers to upgrade their gadgets year in, year out.