Peloton investors prepare for a volatile race

A stationary bike inside a Peloton store is pictured in the Manhattan borough of New York, U.S., January 25, 2022. REUTERS/Carlo Allegri/File Photo

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TORONTO, Aug 25 (Reuters Breakingviews) – Investors at Peloton Interactive (PTON.O) almost never know what kind of workout they signed up for. Shares of the exercise bike maker fell more than 18% on Thursday morning after posting a net loss of $1.2 billion for the three months to June, about four times the deficit for the same period of 2021 The slide erased an equivalent percentage gain to a day earlier after Peloton announced it would begin selling its bikes and other accessories on Amazon.com (AMZN.O) in the United States.

The peloton pedals uphill. The US connected fitness market is down about 51% year-to-date, according to boss Barry McCarthy. This makes rising bike prices a tough sell. McCarthy is not sitting idle – about a third of the company’s quarterly loss was due to restructuring charges. But investors are not expecting much. Thursday’s slide reduces Peloton’s enterprise value to just over $3 billion, after deducting about $500 million in net cash. That’s less than the $3.6 billion in revenue analysts had previously forecast for the year through June 2023, according to Refinitiv. As with all workouts, real results can take a long time to appear. (By Sharon Lam)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by Peter Thal Larsen and Amanda Gomez

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