Peloton, the loss making fitness equipment start-up, will achieve an $8.2bn valuation when its shares begin trading on the stock market on Thursday. The company has priced its stock at $29 a share, at the top of a share price range released earlier this month. The group will float 40m of class A common stock under the PTON ticker on the Nasdaq stock exchange, raising $1.2bn. The pricing would almost double the $4.2bn valuation the company struck in its last private round of fundraising in August last year.
Peloton sells $2,200 exercise bikes and $4,000 treadmills, equipped with 22-inch screens that beam live workouts for a $40 monthly subscription fee. The group has also launched a $20 monthly subscription for users that do not own its equipment.
The listing will test investor stamina for lossmaking companies that burn through cash to grow. Peloton’s revenues doubled to $915m over the year to June 30, but this has come at a price — the company’s losses jumped fourfold over this period to $196m.
The company is also facing a $300m lawsuit from a group of music publishers who claim Peloton has used songs in its workouts without paying licensing fees.
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Peloton’s IPO comes after several hotly anticipated public offerings have disappointed this year. Uber, which listed in May, is trading 30 per cent lower than its $45 a share IPO price, while Lyft, which listed in March, has slipped 42 per cent from its $72 a share debut.
Wework, which was on track to be one of the biggest listings this year, shelved its IPO plans last week and this week replaced its chief executive after investors raised concerns over the company’sgovernanceandleadership.
“You will see a lot of investors looking at this and saying what are the lessons learned from Uber and Wework,” said Michael Underhill, chief investment officer for Capital Innovations, a fund manager that participates in IPOS. “I wish them well, but I don’t think this will be a successful IPO.”
