1) Apple has $200+ billion in cash and needs to invest for future growth which includes strategic acquisitions.
2) Peloton needs more cash to continue growing at 50–100% per year.
3) Peloton has spent 6+ years building a brand but nobody is better than Apple.
4) Peloton has a strong management team and has proven they can execute at a high level.
5) Both companies are already in the hardware, software, manufacturing and distribution business.
6) Both companies are already in the content and streaming business.
7) Apple’s hardware products (ie iPads) are complementary to Peloton’s products.
8) Apple’s wearable products (ie Watch, AirPods, Beats) are complementary to Peloton’s products.
9) Apple has 1 billion customers and Peloton needs help with distribution and cheaper customer acquisition. Apple has 500+ stores to setup Peloton bikes and treadmills for demos.
10) Peloton has a complex business model — having the expertise, capital and brand of Apple would be incredible.
Apple should pay $34/share for Peloton which is a 50% premium to the current price and values Peloton at $10 billion.
After the acquisition I would expect annual revenues to approach $10 billion by 2024 which would add at least $50–60 billion to Apple’s market cap.