Peloton priced shares at $29 after the bell Wednesday, valuing the company at $8.06 billion as it prepares to make its public debut Thursday. That's at the high end of the original $26 to $29 price range Peloton was targeting. The company raised $1.16 billion in the offering.

Peloton is pitching itself to investors as more than just an at-home fitness company. With live and on-demand classes led by popular instructors, plus branded gear and clothing that members can flaunt in public, Peloton is hoping its cult-like following translates to a successful IPO.

Peloton boasts a loyal subscriber-base with over 1.4 million members that logged 55 million total workouts in fiscal 2019. In its S-1 filing, Peloton also said it had a 95 percent member retention rate which helped the company rake in $915 million in revenue. Most of that money came from sales of Peloton's high-margin and high-cost Connected Fitness Products.

The Peloton bike costs about $2,000 and its treadmill more than $4,000. The Connected Fitness Subscription, which allows members to stream classes for $39 a month, accounted for nearly 20 percent of Peloton's revenue for fiscal 2019.

Those classes are only getting more popular. Peloton says the average number of monthly workouts per connected subscriber has about doubled since the first quarter of 2017 to more than 12 workouts a month.

Still, losses for the company are widening. Peloton's annual net loss more than quintupled from $47.9 million in fiscal 2018 to $245.7 million in 2019. The company doesn't expect to achieve profitability in the near future.

Another reason that may give investors pause, Peloton is currently facing a $300 million lawsuit over the use of music streamed in its classes. The National Music Publisher's Association claims tracks from big-time artists like Taylor Swift, Adele, and the Beatles, have been used unlawfully. Peloton has spent $50.6 million on music licensing over the last three years.

Peloton will start trading Thursday on the Nasdaq Exchange under the ticker symbol PTON.

Share:
More In Business
Markets See Unrest as Omicron Variant Fears Grow
The market saw investors react to comments by the World Health Organization's chief scientist, who suggested existing vaccines are likely to offer protection against the new variant. According to Thomas Hayes, chairman of Great Hill Capital, the next two weeks will be crucial as the markets watch for not only the effects of the Omicron variant, but also the Fed's decision on a taper.
Salesforce Sees Big Drop Despite Solid Q3 Earnings
Jason Moser, Senior Analyst at The Motley Fool, joined Wake Up With Cheddar to discuss the latest with Salesforce, as the company suffered its worst day on the market since the beginning of the pandemic.
St. Louis Fed Official Weighs in on November Jobs Miss, Unemployment Drop
The U.S. jobs report fell way short of economist projections after adding just 210,000 in November compared to the expected 550,000. William M. Rodgers III, the VP and director of the Institute for Economic Equity at the Federal Reserve Bank of St. Louis, joined Cheddar to break down the jobs report and explained that while added payrolls didn't meet expectations, the economy is still progressing as the unemployment rate also fell 4.2 percent. "One month doesn't make a trend," Rodgers added. He did note that from an equity standpoint inflation is a cause for concern for middle and low-income families, as holiday season price hikes are expected to hit them hard.
Possible Omicron Superspreader, Shutdown Averted & Love, Hate, Ate
It's Friday at long last. Jill and Carlo cover the latest on Omicron, including a possible superspreader event in NYC. Plus, previewing the November jobs report, a new Zoom feature no one asked for, and when it's no longer a good idea to eat Thanksgiving leftovers.
Load More