Peloton says it may consider cutting jobs and 'resetting' production

[Chik]

I still think they had quite a good run for something so... not sure what the apt word is. Good on those investors who made a timely exit.

Peloton CEO John Foley acknowledged Thursday that the company is "considering all options" — including layoffs and production curbs — after a report that the fitness firm has stopped manufacturing its bikes and treadmills sent shares crashing.

[j44ke]

Explain to someone who tries but fails to understand - why do companies like this go public? Always seems to end in tears.

[cny rider]

Explain to someone who tries but fails to understand - why do companies like this go public? Always seems to end in tears.

They go public so it ends with someone else's tears.

[Tom]

I wonder why products like this become popular. As far as I can tell you have a special piece of equipment that works with only their subscription service, and what I see from my local club most of the use seems to be a virtual spin class. Personally I see no attraction in paying to listen to bad music and have some dork yell at me.

You have to understand, I don't do group rides. I happened to be at a doc I don't see often and he was talking about my fitness and riding and after I told him I like to ride 12-14 hours a week and he asked who I ride with and I said 99+% by myself he looked at me weird and I know he was wondering if he ought to make a mental health referral. So I guess I'm not their target market.

[Chik]

They go public so it ends with someone else's tears.

Ding ding ding!

[j44ke]

I wonder why products like this become popular. As far as I can tell you have a special piece of equipment that works with only their subscription service, and what I see from my local club most of the use seems to be a virtual spin class. Personally I see no attraction in paying to listen to bad music and have some dork yell at me.

You have to understand, I don't do group rides. I happened to be at a doc I don't see often and he was talking about my fitness and riding and after I told him I like to ride 12-14 hours a week and he asked who I ride with and I said 99+% by myself he looked at me weird and I know he was wondering if he ought to make a mental health referral. So I guess I'm not their target market.

Most people don't know who they are unless they are in a crowd of people. See: cruises, New Year's Eve, religious cults, etc. etc. etc.

Peloton's appeal is the same as Zwift and Strava. Their strength and eventual weakness was the bike.

But I'm with you on the riding solo. Riding for me has always been an opportunity to be alone.

[Chik]

Most people don't know who they are unless they are in a crowd of people. See: cruises, New Year's Eve, religious cults, etc. etc. etc.

Peloton's appeal is the same as Zwift and Strava. Their strength and eventual weakness was the bike.

But I'm with you on the riding solo. Riding for me has always been an opportunity to be alone.

Zwift and Strava are not about owning an equipment, but Peloton is, which may have led to it becoming a status symbol amongst the suburbanites?

Just the thought of going on a cruise gives me the shivers...

[dgaddis]

They better not go away, we just got one last month. It’s pretty great for what it is honestly.

[defspace]

happened to be at a doc I don't see often and he was talking about my fitness and riding and after I told him I like to ride 12-14 hours a week and he asked who I ride with and I said 99+% by myself he looked at me weird and I know he was wondering if he ought to make a mental health referral. So I guess I'm not their target market.

I had a dentist ask me if I was a runner after seeing my low heart rate. After saying I was a cyclist she asked if I did spin classes or had a Peloton. I lied and said I had a Peloton to end the discussion. I see another dentist now.

a status symbol amongst the suburbanites?

This is what I've seen at work. Discussions on how great it is to have a Peloton, never discussions on the efforts - and always "Peloton", never "the bike" or "the trainer"

[sk_tle]

They better not go away, we just got one last month. It’s pretty great for what it is honestly.

Does it becomes a brick if the subscription service goes offline or can it still be used as a regular trainer with manual control on resistance or offline "routes" ?

[dgaddis]

You could definitely get on and ride it…but I’m not sure what happens if there’s no service, like I don’t know if you can still see your cadence and resistance on the screen or not. I would think you can…but I don’t know. I’ll check tonight, I’ll disconnect it from wifi and see what happens.

[steve garro]

I still think they had quite a good run for something so...

Great pun, thanks !

Well.........it appears at the moment that maybe covid could end and people want to go outside instead of buying a trainer ?

BRAIN says expect the bike bubble to burst by end of summer, and already you are seeing bike shops trying to dump hi-end bikes on CL

"The future's not what it used to be."


- Garro.

[sk_tle]

You could definitely get on and ride it…but I’m not sure what happens if there’s no service, like I don’t know if you can still see your cadence and resistance on the screen or not. I would think you can…but I don’t know. I’ll check tonight, I’ll disconnect it from wifi and see what happens.

That would have been the first thing I had tried before eventually returning it if it is not satisfying.

[vertical_doug]

Peloton is just like Norditrack. It doesn't go out of business, but it has a limited segment to how large it can grow. My friend who has both the bike and the treadmill thinks the treadmill is better than the bike.

The subscription business is 21% of revenue at 872mm in sales. The company can probably be profitable near term if it closes most of it's retail stores, and produces fewer machines. It's not going to be a 8billion market cap, and probably can survive as a 2-3 billion fitness company like Norditrack does now... It's not all that different than GoPro for lifecycle. It didn't go away, it's just not a $90 company , its an $8 dollar company.... Peloton is probably a $10 company. $27 still looks rich to me.

[j44ke]

Zwift and Strava are not about owning an equipment, but Peloton is, which may have led to it becoming a status symbol amongst the suburbanites?

Just the thought of going on a cruise gives me the shivers...

I think Zwift and Strava are all about the social media aspect primarily and the athletic or fitness part secondarily. Peloton's strength was that it sold an exercise bike as a multimedia gateway to that social media aspect, but then in order to continue growing they had to keep selling those damn bikes because that was the gateway to the social media aspect. The treadmill was a weak attempt to create another entry point. They should have built a new bike that would work with any platform, included power measurement and undercut Wahoo and Tacx on price. Or quit making the bike and just become a virtual environment like Zwift that would work with any device, including all those people who bought their bike.

Also a ton of their growth was based on the epidemic. Once that threat wanes, everyone goes outside.

How is Soul Cycle doing? I bet their classes are returning to size if not in number on the schedule. If they are still in business.

[j44ke]

You could definitely get on and ride it…but I’m not sure what happens if there’s no service, like I don’t know if you can still see your cadence and resistance on the screen or not. I would think you can…but I don’t know. I’ll check tonight, I’ll disconnect it from wifi and see what happens.

Try this Dustin.

https://www.dcrainmaker.com/2020/06/...eks-guide.html

[steve garro]

People are flocking outside - here in AZ we have spring training, a huge golf tournament and every manner of sports / music / festival venue and they are all totally full.

People are ready, covid or no covid and who want to treadmill after a night out yelling and cramming hotdogs and $15 beers?

- Garro.

[bcm119]

Zwift and Strava are not about owning an equipment, but Peloton is, which may have led to it becoming a status symbol amongst the suburbanites?

Just the thought of going on a cruise gives me the shivers...

Not to derail this thread too much, but this strikes me as a "keeping up with the Joneses" moment. My extremely frugal dad used that phrase all the time, and, although no one seems to use it anymore, the principle is still at work. Now, instead of buying the latest minivan or riding mower and waving proudly at your neighbors, you buy a Peloton and post your workouts on social. And it all leaves a trail of unwanted equipment when the fad passes.

[Chik]

Not to derail this thread too much, but this strikes me as a "keeping up with the Joneses" moment. My extremely frugal dad used that phrase all the time, and, although no one seems to use it anymore, the principle is still at work. Now, instead of buying the latest minivan or riding mower and waving proudly at your neighbors, you buy a Peloton and post your workouts on social. And it all leaves a trail of unwanted equipment when the fad passes.

It lubricates the global economy. :)

[TTX1]

Peloton is just like Norditrack. It doesn't go out of business, but it has a limited segment to how large it can grow. My friend who has both the bike and the treadmill thinks the treadmill is better than the bike.

The subscription business is 21% of revenue at 872mm in sales. The company can probably be profitable near term if it closes most of it's retail stores, and produces fewer machines. It's not going to be a 8billion market cap, and probably can survive as a 2-3 billion fitness company like Norditrack does now... It's not all that different than GoPro for lifecycle. It didn't go away, it's just not a $90 company , its an $8 dollar company.... Peloton is probably a $10 company. $27 still looks rich to me.

Good analysis.

Their pre-IPO valuation estimate was based on capturing something like 80% of the total, global home exercise market. Anyone who actually read the filing should have known... it ain't gonna happen with the $2k bike within 3-5 years.

I was surprised/not surprised when the next product was the tread. Not helping.

Hardware is definitely dragging them down.

Next is churn.

If they can maintain long-term engagement, there might be a little more value in the services that's not priced in yet. The market is (very slowly) getting smarter thanks to SaaS and now places a premium on any/all long-term recurring rev streams.

The $B question is: Can they unwind their dependence on hardware for new user acquisition.

The way I see it, they can do this two ways:

a) extend the experience to compete with Apple Fitness + and Nike + to become an all-purpose workout app - including outdoor
b) enable integration with other types of stationary bikes, like Zwift - Kinetic, Wahoo, etc. - so users can experience Peloton with an iPad

I sold my Peloton last year. I don't love "Spin" and the "Scenic Rides" got boring.

Much more engaged by Zwift.

What Peloton and Zwift (and Strava) have in common is gamification - leaderboards, PRs, and a social element.

Even if Peloton fully imploded and actually shut down live classes, I can see the library of classes remaining online for a long time before the service fully shuts down. I doubt it will ever come to that. Amer Sports or someone else will snap it up.