Peloton Interactive Inc. experienced a surge in its shares on Thursday following the announcement of an exclusive partnership with TikTok.
According to a joint statement by the companies, this collaboration will result in the creation of a dedicated Peloton hub on the video-based social network. Users of TikTok will now have access to an array of Peloton content, including live classes, instructor series, celebrity collaborations, and more. Initially, the hub will be available in the U.S., Canada, and the U.K.
Oli Snoddy, Peloton’s vice president of consumer marketing, expressed excitement about introducing the Peloton experience to new audiences in innovative ways. He further added that this development would enhance TikTok’s already thriving fitness content.
After the announcement of this partnership, Peloton shares (PTON, +13.94%) jumped by an impressive 14% on Thursday and rose by an additional 7.5% during after-hours trading.
Last May, Peloton underwent rebranding as a holistic fitness platform. The company decided to shift its focus from exercise hardware to content and subscriptions in order to revive dwindling sales.
Despite enjoying significant growth during the pandemic, Peloton shares have fallen sharply, experiencing a decline of around 96% from their peak of $167.42 in January 2021.
In November, Peloton reported disappointing fiscal first-quarter earnings with a net loss of $159 million, or 44 cents per share, which was worse than expected. CEO Barry McCarthy acknowledged that Peloton had faced challenges in engaging and converting free users into paying members. He emphasized that achieving a turnaround would be a long-term process.
Over the past 12 months, Peloton shares have declined by 29% compared to the 23% gain of the S&P 500.