I decided to break away from the “Peloton ad” thread, since the 15 min clock already expired.
This article was published this morning and points out the serious flaws in the Peloton business model.https://www.fool.com/investing/2019/12/10/the-biggest-problem-with-pelotons-bull-thesis.aspx
I would add also that, despite their claims they are creating a new reality, Peloton faces the same business challenges as every other health club and every other home fitness equipment manufacturer ever.
60% of the people who join a health club in January, will not be exercising by October. (40% will stop by April). Good intentions and inertia may keep them paying dues for a while, but they are at risk of cancelling every day.
Once a club has been open for a few years, they reach a state of equilibrium with membership. The number of new people who join each year is offset almost 1:1 by people leaving. The center where I worked before I retired has been open almost 20 years. They have around 2,400 members. They average 50-60 new members each month. The membership goal for this year was a net 150 new members. They are likely to be well short of that.
I think they will have some success. There is a population subset for which their products are ideal. But, right now, the stock price is not that of a niche product—the early investors are betting that PTON is going to be a game-changing, high-growth company. At the first sense of weakening (and I don’t think a lot of PTON investors really understand the fitness business), the stock will go off a cliff.