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It's about to become easier to purchase a Peloton, which is fantastic news for Amazon.com Inc
AMZN is the world's largest e-commerce corporation, with a market capitalization of more than $1.3 trillion.
Peloton Interactive Inc. (PTON) is the latest company to join that club, saying this morning that a variety of its goods and apparel are now accessible on AMZN's U.S. website. It's the latest in a series of severe steps taken by the manufacturer of at-home fitness equipment to stem fast declining sales and growing financial losses.
The collaboration is beneficial to PTON, but AMZN stands to benefit the most.
During the worst of the pandemic, PTON was one of the best-performing firms. Gyms were closed, employees were working remotely and society was under various states of lockdown. There were few options for consumers to get their fitness fix as a result, so a line of interactive at-home equipment that brought the workout and the lessons to the comfort of your own home was nothing short of a home run.
However, once pandemic restrictions lifted due to mass vaccinations, PTON's sales rapidly declined. The firm will announce its financial results for the fiscal 2022 full year this week and it expects sales to be approximately $3.5 billion, a significant decrease from the $4 billion it produced in fiscal 2021.
Earlier this year, Wall Street was rocked by reports that AMZN was interested in acquiring PTON. The purchase would have been perfectly within AMZN's wheelhouse because the business is no stranger to acquisitions and PTON would have been a very minor one considering the company's current value of $4 billion, according to a 92% decline in its stock price from its all-time high.
It never occurred, but with this new agreement, AMZN gains the benefit of selling PTON's goods on its website and collecting income without the burden of absorbing a company that has lost $1.8 billion in the previous four quarters. Furthermore, PTON's financial status is bleak, with only $879 million in cash on hand, owing mostly to a $750 million loan incurred in May.
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