Peloton’s IPO is unfavorable
Founded in 2012, Peloton is an exercise equipment company which mainly produces a signature luxury stationary bicycle. Their cycles and treadmills are equipped with screens so that their users can join recorded fitness classes remotely.
On Thursday, the company marked its Initial Public Offering which, unfortunately, turned out to be unfavorable for them. The IPO pricing per share was $29, however the opening price was $27, which was below the IPO pricing. On the day of its market debut, shares tumbled about 11% which gave the company a market value of $7.2 Billion.
Peloton’s sluggish start may suggest that the IPO was quite rough for the investors. As a Unicorn startup company, Peloton ended up marking the second worst public debut of the year after SmileDirectClub.
“We are prioritizing growth over profitability for the next few years. You say losses and cash burn; I say investments,” said John Foley, Peloton chief executive, to Financial Times.
However, the company reported a revenue of $915 million in its recent quarter which jumped 110% from the previous year whereas the loss was $195.6 million which grew from $47.8 million.
Peloton’s IPO emerged during a time when much anticipated public offerings turned out to be disappointing including Uber and Lyft.
(Reference: CNBC, Quartz, Barron’s, Financial Times)