Peloton Stock Set to Surge After Partnership with Lululemon

Can the stock distance itself further from penny stock territory?

Deputy Editor
Sep 28, 2023 at 9:20 AM
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Shares of Peloton Interactive Inc (NASDAQ:PTON) are showing signs of life before the bell, after the company announced a five-year strategic partnership with Lululemon Athletica (LULU). According to the two companies, Peloton's content will be available on Lululemon's exercise app, and the latter will become the former's primary athletic apparel partner.

In response, PTON is up more than 13% in premarket trading at $4.65, as it looks to distance itself from penny stock territory. The equity is recovering from a record low experienced after earnings, and on track to move back above its 20-day moving average for the first time since early August. Year over year, Peloton stock is down more than 43%.

Call traders are likely cheering on the news, as bullish bets have been more popular than usual of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 2.21 ranks higher than 83% of readings from the past 12 months. 

It's worth noting short sellers remain firmly in control, with short interest tacking on 19.7% in the last two reporting periods. The 41.72 million shares sold short make up 13.2% of Peloton stock's available float.

 

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