While Peloton faces its own financial upheaval, iFit, the maker of NordicTrack, could be potentially pushed toward bankruptcy due to a $300 million lawsuit from an investor.
According to the New York Post, iFit is being sued by hedge fund Pamplona Capital Management, which lent iFit $200 million in 2019, but now claims that an agreement that iFit made with a Chinese manufacturer violates the terms of the loan. The suit could push the company to file for bankruptcy.
iFit had planned to go public last October but scrapped those plans after Peloton announced its own struggles due to a diminished demand for high-end at-home fitness products. The IPO was projected to have raise around $650 million. Since then, however, the company has been hemorrhaging money, according to the report, including bringing on board Olympic gold medal swimmer Michael Phelps as a brand ambassador and launching “an aggressive marketing campaign.” According to its IPO filing, iFit’s employees number 2,500 with $1.7 billion in revenue in fiscal year 2021, a significant increase from more than $850 million in fiscal year 2020.
Back in November, Peloton filed lawsuits against both Echelon and iFit – the latest in a long line of legal battles between the rival companies – claiming patent violations of Peloton’s leaderboard functionality and other technology, with complaints that iFit’s bikes, treadmills, and ellipticals infringed four of the company’s patents.
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