PTON - Peloton

[Dalal.Holdings]

https://www.google.com/amp/s/www.cnet.com/google-amp/news/apple-fitness-plus-vs-peloton-which-exercise-streaming-service-is-better/

 

https://www.google.com/amp/s/www.businessinsider.com/peloton-cuts-cost-digital-membership-annoying-customers-2019-12%3Famp

 

Hey Pump and Dump,

 

This article certainly doesn’t paint Peloton as a service that the average Joe or Jane is going to want.

 

It also doesn’t make sense that the subscription costs MORE when you buy the equipment. If other apps are charging $10-15 per month and Peloton itself offers an app-only experience in that range, why would I pay $40 just to have access to the “full immersive experience”.

 

Seems like they’re also alienating their most loyal customers by dropping the price of the plain old app but keeping the All-Access price high.

 

I forgot to factor this potential revenue compression into my long-term model. If Peloton sees any sales weakness they will likely pull this lever to get people to stay/join in the first place. Maybe they only end up with $20-25 per month long-term.

 

Of course, you think this suggestion is ludicrous, and that’s why you’re Pump and Dump Dalal, bro.

 

[Broeb22]

I’m having a great time with this. You don’t know me but if you did you would know that this is child’s play.

 

Also, thank you for the continuing strong analysis Pump and Dump. You’re really contributing to the forum.

[ValueArb]

NYT article: The exercise bike company’s virtual classes represent an intense new genre of content: a total curation of the mind.

https://www.nytimes.com/2021/03/16/arts/peloton-cody-rigsby-content.html?referringSource=articleShare#commentsContainer

 

"...While yoga blooms from a philosophical and spiritual tradition, spinning is about your relationship to the machine. You become one with the equipment; you literally clip yourself in. If a traditional bike ride offers some thrill from breezing around outside, Peloton represents a total mastery of the natural environment. The Peloton user submits to the uncharted terrain of Cody’s World; he decides when we are cruising down a flat road and when we are huffing up a hill..."

 

Here's an interesting one from the comment section:

"Cody? You've got to be kidding!  I'm all in with Sam Yo as well as the other instructors from London.  But that's the point.  There is so much choice among the instructors and all for one price.

 

I used to think that Peletoneers were just rich, self-absorbed people who thought going to the gym was beneath them.  Wrong, wrong, wrong!  This is far better than schlepping to the gym.... and cheaper too.

 

I've been spinning for over 10 years at my local gym and loved the communal experience.  Except for fighting traffic, finding a parking space, arguing with someone who took the bike I reserved,  putting up with people who come in late, won't turn off their phones and yap through the entire  class... You get the point.  It's easy to lose the Zen experience after going through that routine.

 

When my gym shut down last year, I rented one of their spin bikes and switched on the Peloton App.  I don't know if I will ever purchase the Peloton bike (my son bought one), but Folks, I AM NEVER GOING BACK TO THE GYM.  The home spin bike experience is too convenient and too invigorating.  And I no longer complain about the instructors since I have so many to choose from.... Sorry Cody!

 

And for those of you who decry the in-door experience and promote traditional biking, there is no comparison.    You cannot get the intense workout provided by Peloton (and other companies) while peddling on the streets dodging cars and pedestrians.

 

Thank you Peloton for saving this addicted spinner!"

 

This sounds compelling, but I still got on my 15 year old mountain bike that costs me $50 a year to maintain and rode outside yesterday. Plenty of paths around here, don't have to cross so much traffic.

 

But when it starts getting hot...

[Jurgis]

This sounds compelling, but I still got on my 15 year old mountain bike that costs me $50 a year to maintain and rode outside yesterday. Plenty of paths around here, don't have to cross so much traffic.

 

But when it starts getting hot...

 

I was trying to change the scenery on my Peloton app ...

 

... and then I realized I was walking outside.  ::)

[Dalal.Holdings]

^ When I get in "smug value investor" mode, I like reminding folks who shop at Armani Exchange that they could have bought their shirts at Walmart instead...  ::)

 

 

 

Peloton is not solving any real or addressable problems anyway. We all know the average person finds motivation on their own to do things like mountain biking outdoors routinely. The average American needs no help with motivation when it comes to regular cardiovascular exercise. That's why heart disease, diabetes, and obesity are things of the past!

[Ice77]

Small but interesting acquisitions by PTON.

 

"Peloton Interactive Inc. recently acquired three companies, adding technology and expertise in wearable devices, artificial intelligence, digital voice assistants, and interactive workout mats. The New York-based fitness technology company bought Aiqudo Inc. in February, and Atlas Wearables Inc. and Otari late last year. Peloton confirmed the acquisitions closed and were done to add talent and technology....

 

The deals could help the company offer its own digital voice assistant, for instance. The engineers who joined from Atlas Wearables and Otari say on their LinkedIn profiles that they are focusing on AI and computer-vision technology..."

 

https://www.bloomberg.com/news/articles/2021-03-22/peloton-buys-wearables-ai-hardware-companies-in-deal-flurry

 

[Broeb22]

Well, it’s been a helluva ride. I’m out. I’m open to getting back in later if the price is right.

 

What price are you a buyer of this, and why?

 

[Broeb22]

SoulCycle in talks to public via SPAC. Great pair trade opportunity with Peloton on re-opening plays.

 

https://www.sportico.com/business/finance/2021/equinox-gyms-may-go-public-1234625501/

[Gregmal]

60% discount on the "moat" at Costco. Next to it another brand with a nearly identical product, at an 80% discount to almighty PTON.

 

[Broeb22]

And then Almighty God said to Moses, “Hold up yo. Before you go...” and he scribbled one last commandment on the tablets.

 

Commandment #11. Thou shalt not worship at the idol of the “disrupters”.

[LC]

https://www.theguardian.com/us-news/2021/apr/17/peloton-treadmill-us-regulators-child-death

[Jurgis]

I wonder if this will pull the rug from under the stock.

[Broeb22]

10 hours ago, Jurgis said:

I wonder if this will pull the rug from under the stock.

Probably not. I think unless this is a widespread issue, isolated instances won't dissuade people from it (see Tesla and its various well-publicized crashes over time).

[Spekulatius]

17 hours ago, LC said:

https://www.theguardian.com/us-news/2021/apr/17/peloton-treadmill-us-regulators-child-death

Looks like the peloton treadmill has no cover at both ends where the endless band turns around and moves underneath the machine.

This looks like a lousy design safety wise and all those treadmills probably need to be pulled from the market.

[Castanza]

16 hours ago, Spekulatius said:

Looks like the peloton treadmill has no cover at both ends where the endless band turns around and moves underneath the machine.

This looks like a lousy design safety wise and all those treadmills probably need to be pulled from the market.

That's a bit of an overreaction imo. Pretty much every treadmill on the market has no end covers. At least in the rear. This lawsuit or coming lawsuits, sound frivolous.

No rear covers

https://www.proform.com/treadmills/carbon-t7?gclid=Cj0KCQjw1PSDBhDbARIsAPeTqrdZXQQaXvdf7y2H2QXq4T5QB_tVNh7YiGiUWECY7L8opR0HqUBRgiwaAuhHEALw_wcB

https://www.nordictrack.com/treadmills/exp-7i?gclid=Cj0KCQjw1PSDBhDbARIsAPeTqrdvpcWD4eqAKBvVmYTXoF-5RsM1o476fO9dTepMGlzH8I1gl1b0WAIaAnB3EALw_wcB

https://www.mercari.com/us/item/m75993134552/

Edited April 19, 2021 by Castanza

[Broeb22]

@Dalal.HoldingsWhen are you going to come to the defense of your best trade ever, Pump and Dump?

[Broeb22]

Peloton Recall

Dalal, can you tell me why this is going to make PTON a long term winner? 

[Gregmal]

Any dip buyers here? Looks cheap on 2028 adjusted EBITDA assuming we can count on a pandemic like every 3 years. 

[Spekulatius]

On 4/18/2021 at 6:28 PM, Spekulatius said:

Looks like the peloton treadmill has no cover at both ends where the endless band turns around and moves underneath the machine.

This looks like a lousy design safety wise and all those treadmills probably need to be pulled from the market.

Well, at least they are recalling their badly designed treadmills finally:

https://www.cnbc.com/2021/05/05/peloton-recalling-all-treadmills-after-reports-of-injuries-one-death.html

[Castanza]

7 minutes ago, Spekulatius said:

Well, at least they are recalling their badly designed treadmills finally:

https://www.cnbc.com/2021/05/05/peloton-recalling-all-treadmills-after-reports-of-injuries-one-death.html

Both surprised and not surprised. What makes them worse than other designs? As shown above in my post, pretty much every treadmill has an open back like that. 

[Spekulatius]

Sounds like it's not the open end per say, but rather formfactor and belt that cause the issue:

The spokesperson also told Consumer Reports that some of the design features unique to the Peloton Tread+—notably its height off the ground and its belt mechanism—may make the treadmill particularly dangerous, meaning there may be no safe way to use the product.

[Gregmal]

IDK, but my favorite part of this whole saga was when the "value managers" starting "taking a look" and seeing this as a long last fall.....After missing it(how do you "miss this", it wasn't hidden and was a popular IPO) at like $25....My understanding of the value investing doctrine is that part of the game is buying things that are out of favor and thus mispriced...not convincing yourself to like it and go long at its peak popularity....

I think, as was touched on a lot last Q4/1...there are and were red flags everywhere...including value guys capitulating and shorts being nonexistent. 

[KJP]

Fairly lengthy thoughts about Peloton:  https://yetanothervalueblog.com/2021/05/talking-my-obsessions-1-pelotons-recall-pton.html

 

[Spekulatius]

I don’t think PTON was ever a stock that was bought on value on the way up or on the way down, it always was more of a story stock.

FWIW, the recall of the treadmill is probably not the economically relevant to the PTON story. It will lead to a one time writeoff, but probably won’t damage the customer reputation all that much.

Which value manager actually has recently purchased PTON? I am not aware of any.

[kab60]

1 hour ago, Spekulatius said:

I don’t think PTON was ever a stock that was bought on value on the way up or on the way down, it always was more of a story stock.

FWIW, the recall of the treadmill is probably not the economically relevant to the PTON story. It will lead to a one time writeoff, but probably won’t damage the customer reputation all that much.

Which value manager actually has recently purchased PTON? I am not aware of any.

Greenwood if IIRC, smelled like capitulation to me... Lots of 'value' guys seemed to look for 'excuses' to get on the momo train after underperforming for long... At what seems llke the worst time