Peloton Shares Rebound After Amazon Denies Echelon Partnership
(Bloomberg) -- Peloton Interactive Inc. shares rebounded Wednesday after Amazon.com Inc. said it’s not partnering with Echelon Fitness to sell a rival home fitness bike.
Earlier this week, Echelon Fitness unveiled an “Ex-Prime” bike for $500 that it said was developed in collaboration with Amazon. That was significantly less than Peloton’s machines that cost well over $1,000. The news pushed Peloton shares down as much as 6.7% early Tuesday before rebounding to close with a decline of less than 1%.
Later Tuesday, Amazon denied they were in a partnership and told Echelon Fitness to stop selling the bike.
“This bike is not an Amazon product or related to Amazon Prime,” an Amazon spokeswoman said in a statement. “Echelon does not have a formal partnership with Amazon. We are working with Echelon to clarify this in its communications, stop the sale of the product, and change the product branding.”
Peloton shares rose 4% to $98.13 at 11:41 a.m. Wednesday in New York after earlier jumping as much as 6.4%.
Echelon Fitness blamed the incident on a “miscommunication.”
”This product was built by Echelon to sell exclusively on Amazon,” an Echelon Fitness spokesperson said. “We are working to rebrand the product to get it back up for sale as soon as possible.”
In an interview on Fox Business, Echelon Fitness Chief Executive Officer Lou Lentine said the company began “working with Amazon in early January. It just was a miscommunication with the internal team. We are working on a new name for the bike.”
Amazon has earned a reputation for shaking up established markets from books to consumer electronics. When investors sense the company entering a new sector, they often react quickly.
©2020 Bloomberg L.P.