Sudden cramp

26 September 2019 By John Foley Follow @johnsfoley

The exercise-bike maker’s IPO valued it at $8 bln but its stock promptly sagged. The lack of profit is not the big problem. It’s the competition from other connected-workout startups and health fads plus dependence on a few key suppliers. That makes Peloton look anything but fit.

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Shares in Peloton Interactive fell on their first day of trading in New York on Sept. 26.

The company, which makes technology-enabled exercise bikes and treadmills, priced its initial public offering a day earlier at $29 per share, the top of its indicated range, giving it a market capitalization of $8.1 billion. By 3 p.m. in New York, the stock was down 13% at $25.11.

Peloton has two classes of shares. Class B shares, which have 20 votes each, are held mostly by executives, directors and large pre-IPO investors. The offering consists of Class A shares, which have just one vote each.

The company made $915 million in revenue for the financial year ended June 30, more than twice its sales the year before. Its operating loss of $202 million was roughly quadruple that of a year earlier.

Context News

Shares in Peloton Interactive fell on their first day of trading in New York on Sept. 26.

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