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The Peloton interactive workout company has announced a share price of $29 each, for its IPO. The company has recorded consistent losses and it is generally hoped that this IPO would change things considerably.
Peloton Interactive Inc., a fitness company popular for its engaging workout routines run on its exercise equipment, has announced on Wednesday, its decision to fix its share price at $29 each, for its initial public offering (IPO). The company’s press release announces that the public offering will begin today September 26 with the “PTON” ticker code and will offer 40 million shares of its Class A common stock.
Peloton is looking to raise $1.16 billion with a minimum of $8 billion as the initial valuation. Trading will take place on the Nasdaq Global Select Market and if 40 million shares are completely sold, Peloton is expected to have an outstanding 280 million shares with an expected market cap of at least $8 billion.
Peloton announced a $915 million figure as its entire revenue for its fiscal year which ended on Sunday the 30th of June, 2019. This represented a 110% increase from the total revenue of $435 it received for its 2018 fiscal year, a big leap from the 2017 fiscal year which saw $218.6 million. Months later in August, the company published documents confirming its IPO.
Before now, it was said that the price per share would fall anywhere between $26 and $29, meaning that the official figure chosen is the maximum. The company had also successfully pulled in before now, $994 million from a $4.15 billion private market valuation. Regardless, Peloton has been operating at a considerable negative as it racked up a $245.7 million loss in 2019, more than $197 million from its 2018’s $47.9 loss.
Founded in 2012, Peloton currently boasts of about 1.4 million subscribers (everyone who has an account) and these users have access to the firm’s large digital pool of fitness material which can be streamed live and at any time. Subscription for the fitness content sits at $39 per month with an option for mobile content on the Android and iOS platforms, at $19.49 per month.
The company’s exercise equipment is within the range of $2,200 to $4,295 each, with the bikes at the lower end and the treadmill at the upper end and before now, Peloton has said that its 2019 fiscal year saw 58 million workouts fully completed.
Some analysts believe that the company’s expensive equipment, coupled with its huge losses, could possibly slow down the IPO especially when the somewhat considerable subscription charges are considered. There is also the case that other firms in the same industry including GoPro (GPRO) and Fitbit (FIT), have not had a great time in the market.
The lead book-running managers for the IPO are Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, with BofA Merrill Lynch, Barclays Capital Inc., UBS Securities LLC, and Cowen as book-running managers. The announcement notes that the offering will come to an end on Monday the 30th of September, 2019, “subject to the satisfaction of customary closing conditions.”