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The recent rate-fueled valuation crush among next-gen tech has created some ripe acquisition opportunities for cash-rich mega-cap tech. After rapidly deteriorating investor sentiment, Peloton PTON is the latest acquisition target, with poor management decisions dragging its market value -80% below the highs it reached a year prior.
Now, below $10 billion in market value, Peloton is getting looks from Amazon AMZN and its growth-hungry new CEO Andy Jassy, who’s looking to expand its broad-based subscription offerings by any means necessary. Nike NKE also joined Amazon on the list of potential PTON suitors to accelerate this shoemaker’s digital/subscription business evolution.
This leading exercise equipment/software company saw its shares rise more than 20% in Monday’s session, but the PTON still sits 5x below its over-euphoric $50 billion market cap last January.
Microsoft MSFT kicked off 2022’s M&A action with a $70 billion bid for Activision Blizzard ATVI. ATVI had been driven down almost -50% off its 52-week highs in the wake of allegations of unchecked misconduct in the workplace, yet its underlying growth outlook remained intact.
Profitable tech giant’s recent cash infusion from the pandemic’s digital acceleration has them on the hunt for deals, and they are finding them in high-growth unicorns where management is blundering.
Global dealmaking reached a record $5.9 trillion in 2021, and with more than 60% of US CEOs ostensibly pursuing an acquisition (according to EY), 2022 M&A activity is likely just heating up.
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