The rise and fall of Peloton: How this fitness startup went from Kickstarter to $50 billion valuation and then to losing 75% of its value in one year; now its executives and insiders were caught selling $500 million stocks
We first covered Peloton three years ago after Citron Research wrote a scathing report today saying “Unless Peloton invents a piece of equipment that works out for you – this is going to $5 (which is still a $1BN-$2BN market cap).” Two days earlier, Peloton lost $1 billion in market capital due to a sexist “Peloton Girl” bike ad.
However, the report did little to slow Peloton’s momentum. By 2020 when the pandemic came, the connected-fitness company benefited from the lockdown as more people spent more time at home due to the covid lockdown. The shares of Peloton skyrocketed by 434% in 2020. At one time, Peloton was valued at about $50 billion.
Peloton was one of the best-performing stocks since the pandemic began in 2020 as gym closures boosted demand for their home fitness products. But with gyms now reopening they’ve seen demand fall off a cliff. But Peloton’s demise would come a year later. With gyms reopening in 2021, Peloton saw the demands for its products fall off a cliff. Its stock price lost about two-thirds of its value since its peak and its path to profitability is now more uncertain than ever.
In 2021, Peloton stock tanked by 76% due to fulfillment delays, safety issues, and the reopening of the economy, and people started leaving their homes. Seeing the writing on the wall, Peloton executives and insiders sold nearly $500 million worth of their stock before its big decline, according to a report from CNBC, citing filings with the Securities and Exchange Commission (SEC).
Today, Peloton stock is down more than 80% from its highs last year, and it hit a 52-week low of $29.11 on Tuesday. “Yet the company’s CEO and other executives sold millions of shares at prices over $100 a share in the months leading up to the big declines,” CNBC wrote.
In the video below, our friends at Wall Street Millennial, discuss in detail the rise and fall of Peloton. Enjoy!
Founded in 2012, Peloton has built a name for itself as a go-to home fitness solution thanks to its popular stationary bike and its new treadmill. With instant access to classes, performance tracking metrics, and a motivating real-time leaderboard, Peloton is changing the way people get fit through a comprehensive and socially connected experience that makes every workout both efficient and addicting. However, Peloton is about to face its biggest challenge since its inception eight years ago. Apple, the 800-pound gorilla, is coming after one of its core business–virtual workouts.