Peloton get the top price of target range in its IPO

Peloton get the top price of target range in its IPO


The U.S. fitness startup Peloton Interactive Inc, which is known for its on-demand workout programs on its exercise bikes, went through an initial public offering last Wednesday raising $1.16 billion after getting the highest target range for its stock price.

Peloton, just like many other startups, is yet to turn itself into making profits as it did not make profit for at least last three years, its IPO would proved to be a test case of investor eagerness for loss-making stocks as considering some of the stake holders in the market.

For the IPO, Peloton was targeting the price range of $26-$29 and the company said in its statement that it priced the IPO at $29 per share.

The share price of $29 values Peloton at about $8.1 billion which is nearly double of $4.15 billion of valuation it has got in the most recent funding round in the private market, according to data provider PitchBook.

Peloton’s IPO comes after listing of teeth alignment company, SmileDirectClub which succeeded to price its shares exceeding the target range in its IPO but the stock plummet on its market debut earlier last month. SmileDirectClub was also a loss-making firm that lost $74.8 million which, like Peloton, remained doubled to the losses made by the company in last year.

Similarly, ride-hailing firms Lyft Inc and Uber Technologies are also in struggling position since their IPO earlier this year, only because of not having any solid strategy to become profitable.

Peloton was founded in 2012 selling indoor bicycles in packages which require customers to get the membership if they wanted to access the on-demand and live classes from home.

Peloton revenue came more than double to reach $915 billion for the year ended June 30, but its net losses also increased from $47.9 million to $195.6 million for the period.

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I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities. I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.