Peloton IPO: Early investor not worried about steep losses
Peloton shareholder Michael Duda on the high-end bicycle maker filing for IPO.
Peloton Interactive slid 6.9 percent in its trading debut, a sign that investors may have a waning appetite for money-losing companies.
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Shares of the home-fitness company opened at $27 a piece, down from the $29 where they priced on Wednesday evening. At $29 a share, the offering would've raised $1.16 billion and given Peloton an $8.2 billion valuation.
Peloton will trade on the Nasdaq under the ticker “PTON.” Goldman Sachs and JPMorgan Chase were the lead underwriters for the initial public offering.
In its fiscal year ended June 30, Peloton’s revenue more than doubled to $915 million, but its losses widened to $195.6 million, up from $47.9 million the year prior, according to a filing with the Securities and Exchange Commission.
Ahead of its IPO, Peloton has poured money into hiring and building out showrooms. Job postings are up 117 percent this year and the company’s showroom count has surged by 150 percent this year to 126, according to the research firm Thinknum Alternative Data.
Peloton is the latest in a long line of money-losing companies to go public in 2019, including ride-hailing giants Uber and Lyft, social media platform Pinterest and the online pet food retailer Chewy.com.
“IPOs completed during 2019 are projected to be the least profitable IPOs of any year since the Tech boom,” Goldman Sachs Chief U.S. Equity Strategist David Kostin wrote.
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He says his team found that while first-year profitability had no impact on the IPOs performance in its first 36 months of trading, achieving profitability by year three mattered for outperformance.
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