Peloton IPO: Worth it?


>>>WELCOME BACK TO THE FINAL ROUND HERE ON YAHOO FINANCE. JOINING ME FOR THE FINAL HALF HOUR OF THE PROGRAM, JEN ROGERS AND EDITOR IN CHIEF ANDY SERWER. LET’S TAKE A LOOK AT WHERE THE MARKETS SETTLED ON THIS WEDNESDAY. POSITIVE ACROSS THE BOARD. ALL THREE MAJORS HIGHER. DOW UP ABOUT A FULL PERCENTAGE POINT. NASDAQ UP ABOUT THREE TENTHS, FOUR TENTHS OF ONE PERCENT. THE S&P UP ABOUT 65 BASIS POINTS. >>LET’S TURN NOW TO OUR TOP TAKES. STORIES WE’RE WATCHING IN TODAY’S MARKET. YOU KNOW WHAT, IT’S ALL STILL ABOUT PELOTON, PELOTON FILED PAPERWORK ON TUESDAY FOR ITS IPO. JUST ABOUT 23 HOURS AGO. AMONG THE DISCLOSURES, IT PULLED IN $915 MILLION IN REVENUE IN ITS MOST RECENT FISCAL YEAR. THAT’S MORE THAN DOUBLE THE REVENUE IT POSTED IN THE YEAR PRIOR. BUT PELOTON’S LOSING MONEY. ALMOST $200 MILLION WORTH IN THE MOST RECENT YEAR. THAT’S UP FROM LAST YEAR WHEN THEY LOST JUST ABOUT $48 MILLION. THAT’S REALLY JUST THE BEGINNING. WE’VE BEEN DIGGING INTO SOME OF THE NUMBERS HERE. OF COURSE ONE OF THE THINGS THAT STOOD OUT TO ME IS HOW MUCH PEOPLE ARE ON THEIR BIKES. AS SOMEBODY THAT HAS ONE. I FEEL LIKE I’M NOT RIDING AS MUCH. THE CHART HERE IS NOT TERRIBLE. >>THAT’S A POSITIVE. ACCORDING TO THEM. >>IT IS A BIG POSITIVE. I WAS KIND OF IMPRESSED WITH THOSE NUMBERS IN THERE. >>IT WAS ALMOST TOO GOOD TO BE TRUE. I MEAN, FIRST OF ALL. SO I THINK AS WE GET DEEPER AND DEEPER INTO THIS IPO SEASON YOU SEE THESE COMPANIES JUST GOING FURTHER AND FURTHER OUT ON A LIMB WHEN IT COMES TO BEING APPEALING TO INVESTORS. SURE, YAWNING LOSS IS A GIVEN. INCREASE RISK, INCREASE RISK FACTORS FROM THE LAST GUY, A GIVEN. I MEAN AT SOME POINT SOMETHING’S GOING TO GIVE HERE. THE THING ABOUT THIS TO ME IS THAT I’M SORRY, THIS IS A VIEW BUT WHAT I BELIEVE. EXERCISE EQUIPMENT, THIS IS NOTHING MORE THAN THAT. I KNOW THERE’S ALL THIS AND THAT. IS A TREND. AND THIS IS LIKE A ROLLER BLADE IPO. ROLLER BLADE, DO YOU KNOW HOW MANY PEOPLE ROLLER BLADE IN CENTRAL PARK NOWADAYS? >>I HAVEN’T SEEN ANY. >>SOME PEOPLE, YOU KNOW. >>IT’S LIKE A RETRO PLAY NOW. IT’S ONE TENTH OF ONE PERCENT OF WHAT IT WAS AT ITS PEAK. >>THAT’S WHY THEY CAN’T. SOMETIMES I READ IT AND THINK WHY CAN’T THEY JUST SAY WE SELL $2000 BIKES AND THEN PEOPLE PAY US $40 A MONTH AND PEOPLE ARE RIDING AND THIS IS A GREAT BUSINESS. BUT YOU CAN’T COME OUT. >>SNAKE OIL. >>AND SAY THAT IF YOU WANT TO BE WORTH $8 BILLION. YOU NEED TO, WHICH IS THE VALUATION LAST SUMMER WAS LIKE 4 SOMETHING. IF YOU WANT TO COME OUT AT 8 BILLION, YOU NEED TO BE LIKE A MEDIA COMPANY AND A BIKE COMPANY AND A MUSIC COMPANY AND SELL CLOTHING AND ALL OF THAT TO MAKE IT WORK. >>SO TO ANDY’S POINT. BASICALLY YOU NEED TO SAY WE ARE BUCKING EVERY TREND THAT WE’VE EVER SEEN IN ALL THIS STUFF; RIGHT? THE CHART THAT WE’VE TALKED ABOUT A NUMBER OF TIMES TODAY IS LIKE THE CHART THAT SHOWS THAT THEY HAD IN THEIR S 1. PEOPLE WORKING OUT MORE AS TIME GOES ON. WHICH, AGAIN, IS AGAINST ALL EVIDENCE OF HOW