Peloton's First Trade was Below Its $29 IPO Price
Peloton priced at $29 in an initial public offering (Goldman Sachs and J.P.Morgan Securities served as lead underwriters for Peloton’s IPO), lost steam by the time of its first trade on Thursday and opened at $27 per share. Peloton had raised $1.16 billion in selling 40 million class A shares at $29 apiece late Wednesday, giving the company an initial valuation of $8.1 billion.
But Wednesday’s early price action could not hold its steam and an open of as low as $24 per share scared the companies execs. This has been a trend for tech unicorns. Shares of Uber and Lyft, other money-losing “unicorn” companies that had been valued at more than $1 billion in private markets, currently trade below their IPO pricing. Peloton has run at a loss since inception in 2012, and posted a net loss of $195.6 million for the year ending in June. (4 times that of the year prior).
Peloton CEO John Foley said the company is expected to be profitable by 2023 during an interview with CNBC. Revenue during the most recent fiscal year grew 110% to $915 million, rising at an even faster pace than the 99% increase from the year prior. To date, Peloton has secured 511,000 connected fitness subscribers and the company reported its most recent churn rate was just 0.65% per month. Total workouts have risen at a quicker pace than net subscriber additions, underscoring a loyal user base. Peloton pegs its total addressable market at 67 million households, including 45 million in the U.S.