Sep 12 2022
Article #1- Peloton $1.2 Billion downhill ride
Riding a bike was so fun as a child. We never thought of it as a workout or something we had to do. We just did it. As you’re an adult now you might have heard of Peloton. The stationary bike that allows your to interactively ride anywhere in the world. They are now facing a $1.2 Billion loss in their past quarter of 2022.
For Peloton what does this mean? Both of their founders, John Foley and Hisao Kushi, have put in their resignation letters to the board. The New York Times informed us that John loves Peloton and that he will continue to use the product. He loved his time working at Peloton.
During COVID, Peloton exploded. They had their highest sales and their best year in the stock market. The issue that arose was the supply chain. Since people had such a high demand for the bikes at home, Peloton had increased their production. However, when people started to go back to gyms, Peloton had a lot of inventory that was sitting around. People also stopped using the bikes which meant no recurring revenue.
According to their website, you can pay $39 per month to use the bike with their workout programs and instruction. This small amount of money compared to a gym membership is do-able for some people. However, $1.2 Billion of loss in a quarter is what is causing Peloton to ride downhill. According to Yahoo Finance, COVID enabled their stock to reach $167 per share. Now the stock is trading at $11 per share.
Peloton is bringing new members onto the board and shifting their teams to attempt to make a change for their customers.
https://www.nytimes.com/2022/09/12/business/peloton-resignations-foley-kushi.html
https://www.nytimes.com/wirecutter/reviews/peloton-review-what-to-know-before-you-buy/
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