Full disclosure: This was written after CNBC said AMZN might be interested in PTON.
It all gets down to Prime. Prime is the clear leader in membership fees given the rate they charge. I mean if you combined Costco’s membership, Walmarts selection, UPS’s shipping with Netflix’s streaming you end up with the recipe for Amazon. The business is well, a jungle.
Owning Peloton is a great value add for people who want Amazon’s retail business and want at home fitness. I can see them rolling out another tier of Prime, Prime Fitness. Or a bundle of retail, streaming and fitness.
It’s basically Apple’s subscriptions with a retail business thrown in. Conceptually it makes no sense but somehow it works.
This is pure speculation. I have no position in either stock. Cheers!
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