Shares of Peloton (PTON 2.15%) are up 9% as of 12:30 p.m. ET Thursday after the connected fitness platform specialist announced an exclusive new content partnership with social media platform TikTok.
NASDAQ: PTON
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Why Peloton is joining forces forces with TikTok
More specifically, Peloton and TikTok are launching a new dedicated, co-branded fitness hub on the China-based social media platform dubbed "#TikTokFitness Powered by Peloton." The hub will include custom Peloton content, including select live classes, original instructor series, creator patrnerships, and celebrity collaborations.
Peloton previously announced an apparel partnership with Lululemon last September and signed a deal to sell its products on Amazon in late 2022. But this will mark the first time Peloton will produce bespoke social content for a partner outside of Peloton-owned channels. With over 1 billion active users globally, it's not hard to see why Peloton has opted to partner with the short-form mobile video leader.
What's next for Peloton stock?
Peloton stock has rallied nearly 30% since the start of November 2023, helped by a strong end to the year for the broader markets. But shares are still down around 65% from their 52-week high, set last February, as the company endured widening losses and a contracting subscriber base. It's also executing an ongoing shift toward digital subscriptions and away from hardware.
While Peloton has taken significant steps in the right direction by making that shift, it remains to be seen whether partnerships like this one will be able to move the needle to drive significant incremental revenue and narrow the company's losses. Until we see more tangible evidence to that end, investors should tread lightly when considering Peloton as a potential portfolio candidate.
