Peloton riding on rocky roads. Is this good news for Amazon, Nike, and Apple?

Gym equipment maker Peloton (PTON) was one of the thriving companies during the pandemic. Peloton stock surged more than 440% in 2020 in the coronavirus market rally and reached a peak in January 2021. Despite having more than 6.2 million members and thriving during the pandemic, the 10-year-old brand is on the verge of going out of business due to the low demand for products.

The company saw a surge in the early days of the pandemic following the lockdown and people's need to keep fit while they stay at home. Its exercise bikes were a huge hit at the time but have recently seen the other side of the coin as more people are spending more time outdoors.

It’s not all bad news for Peloton as big-name companies like Amazon (AMZN), Apple (APPL), and Nike (NKE) are reportedly bidding for the company. Peloton’s stock jumped 17% on Monday following the news.

Signing a deal with a worthy potential partner or buyer may be inevitable for Peloton as its shares have plunged more than 80% from a January 2021 high. The company has come under more pressure from all angles in recent weeks after a report which stated that Peloton had stopped manufacturing new treadmills and bikes.

Peloton CEO John Foley denied the reports in a statement released to employees last Thursday, but the company insinuated that it was rather “resetting” production while it adapted to more “seasonal demand curves.” Foley, however, said that there was a need to cut costs and the company is “considering all options” as part of its efforts to make the business more flexible, which may include layoffs. He added that the company was “taking significant corrective actions to improve our profitability outlook and optimize our costs across the company.” Shares plunged 24% after the announcement.

Some observers of the company seem to think otherwise about Peloton’s reshaping decision. Instead, they think selling is a better option for the company. Investment firm Blackwells Capitals says it has “grave concerns” about Peloton’s performance and calls on the company’s board of directors to fire Foley and opt for a sale.

Peloton generates most of its revenue from the sales of its bikes and treadmills which range in price between $1,895 to $4,295. Part of its revenue is also generated from an all-access membership for owners at $39 a month, and a digital membership for customers with no access to bike or tread classes at $12.99 a month.

Amazon deal: Peloton’s recent stock plunge has attracted the attention of both investors and observers. There have been calls for a potential sale to save the company and the company has potential buys including Amazon. Media reports say the tech giant is in talks with advisers about a potential deal but much progress hasn’t been made. Some reports say that there’s no guarantee that Peloton would agree to a buyout.

Apple deal: In 2020, Apple partnered with Peloton with the launch of its Fitness+, a subscription service compatible with the Apple Watch. Analyst Ives thinks partnering with Peloton would be a strategic move for both companies as it would ramp up Apple’s customer base in the health and fitness category and “catalyze the company’s aggressive health and fitness initiatives.”