Peloton sells US$2,200 exercise bikes and US$4,000 treadmills, equipped with 22-inch screens that beam live workouts for a US$40 monthly subscription fee. The group has also launched a US$20 monthly subscription for users that do not own its equipment.
The listing will test investor stamina for loss-making companies that burn through cash to grow. Peloton's revenues doubled to US$915 million over the year to June 30, but this has come at a price — the company's losses jumped fourfold over this period to US$196m.
The company is also facing a US$300m lawsuit from a group of music publishers who claim Peloton has used songs in its workouts without paying licensing fees.
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 US$45 a share IPO price, while Lyft, which listed in March, has slipped 42 per cent from its US$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's governance and leadership.
"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."
In addition to the listing, TCV, a venture capital firm that led Peloton's final private fundraising round in August last year, will purchase US$100m of the group's shares in private placement deal.
The TCV deal will use the IPO price to determine the number of shares it will buy but these shares will not come from the 40 million in stock released to the public on Thursday.
Written by: Richard Henderson
© Financial Times
