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.
If you're planning to host Thanksgiving dinner this year, be prepared to shell out more cash for your bird. Kristin Myers, Editor-in-Chief at The Balance, joined Cheddar to talk about the rising cost of food due to a number of factors like drought, inflation, and supply chain issues. She noted that families can expect to pay 21 percent more for their holiday meal compared to last year.
John Jannarone, Editor-in-Chief at IPOEdge.com, joined "Wake Up With Cheddar" to talk about Sweetgreen's monster first day of trading and whether or not the company is being overvalued. "It takes a long time for a company of this kind to prove its track record, and they haven't done it yet," he said. He noted that the company is worth more than Shake Shack at its current market cap.
Jill and Carlo are back to cover the latest in the Rittenhouse trial, new information on the origins of Covid, return-to-office and more.
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Roundhill Investments is investing in the metaverse, and it wants consumers to as well. The firm launched a metaverse exchange-trade fund called Meta back in June - the first ETF in the U.S. targeting investments in the next era of the internet. The fund's launch came months before the company formerly known as Facebook changed its name to Meta Platforms. Since the launch of Roundhill Investments' Meta ETF, it has grown significantly, reaching $500 million in assets. Roundhill Investments Vice President Mario Stefanidis joined Cheddar News to discuss.
The U.S. Justice Department has filed a lawsuit against Uber after it was discovered that disabled people were being disproportionately affected by extra “wait time” fees. Attorney Jonathan Bell joined Cheddar to discuss.
Things are expensive: both the important and the not-so-important stuff. October saw the largest year-to-year increase in the consumer price index in over 30 years. Inflation remains a top concern for the average American consumer as some stress over the price of everyday essentials like milk, beef, and gasoline.
But that doesn't seem to be affecting overall retail shopping.
U.S. retail sales rose by 1.7% in October, a sign that consumers are willing to spend more heading into the holidays despite rising inflation. The elevated spending levels suggest solid holiday sales this month and next. On top of that, major retailers like Target and Walmart have come out this week and said they're set to be fully stocked for the holiday season, easing any concerns customers might have about supply chain issues leaving empty shelves before the holidays.
Brittain Ladd, retail strategist and consultant, joins None of the Above to discuss.
