Lululemon (NASDAQ:LULU) has been lagging since the company reported earnings in early June. However, LULU stock caught a bid on June 30, on news that it will acquire Mirror for $500 million.
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Shares closed off the highs, but still climbed 6% on the day. Why the enthusiasm? Because Lululemon bought into a growing secular theme that plays nicely with its current business model.
Breaking Down the Deal
Mirror is an at-home workout startup. Like its name implies, the company’s lead product is literally a giant mirror that also plays video. That video allows instructors to lead live classes, giving a gym-like experience to users who are at home.
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It’s sort of like Peloton (NASDAQ:PTON), shares of which have exploded higher in 2020