FAST FIVE: Peloton IPO Guide… And Why It Makes No Sense
We fully admit the product is exciting and unique in the market, but Peloton still faces the same problem that keeps every gym owner up at night.
We think the company will struggle as a public company and recommend investors steer clear, or bet on a fall in price as the fundamental value is at best $14/sh and more likely $7/sh.
When you look at retention the right way, we estimate Peloton's retention rate is more like 80% (20% quit over 12 months”.
Peloton is hoping investors have short term memory loss as it looks to be trying for a valuation that previously fell flat with investors.
Given the low cost basis of insiders, we expect at least some of the 84 million shares issued below $0.50 will be sold once the lockup expires.