Daily Brief - Alexa and Siri fighting over Peloton

Peloton stock surged 30% in after-hours trading Friday after The Wall Street Journal reported that the firm is receiving interest from potential suitors, including Amazon.com. Amazon has been speaking to advisers about a potential deal, according to sources near the company. Seeking Alpha reports Apple may in fact be the favorite to purchase the exercise bike maker.

The company was once a pandemic darling as homebound customers ordered its pricey exercise equipment. The once-torrid growth has slowed, however, and the company has lately been better known for the early demise of Mr. Big. The stock closed Friday at $24.60, below its September 2019 IPO price of $29.

There are several potential ties between Peloton and Amazon’s existing businesses, particularly Amazon’s stellar logistics operation, which could help the bike company address the nagging supply-chain issues. And Apple? Well, the bike has a giant screen that already comes standard …

Meta dreams come crashing down

Peloton surge was just icing on the cake in a volatile week that saw Facebook (sorry, Meta) set a record for a one-day wipeout in market value: $240 billion! Its shares tanked 22% after the company disappointed on earnings and user growth. Meta’s quarterly revenue growth slowed, with sales up just 20% from a year ago (compared with 33% growth the previous quarter and 56% before that). Even worse: Quarterly profit fell by $1B from a year earlier.

Pay up, Pal

Meta was far from alone among the giants that faced a reckoning last week. PayPal had its worst trading day of all time, with shares plunging 24% on a weak yearly forecast (fewer than 20M new accounts vs. 49M last year).

Spotify shares fell as much as 17% after the pandemic thriver disappointed on user growth and paid subscription forecasts for the first quarter. It didn’t mention the Joe Rogan Covid-misinformation controversy.

Diamond hands are buying

Long term investors have been snapping up many of these tech fallen angels. Those with a proven track record of reinvention and market dominance (PayPal and Netflix could easily fall in that category) are probably good longer term bets. The rest may be good for a trade, too!