Skip to content
Do you have adblock enabled?
 
If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(CNBC)   The wheel is falling off Peloton   (cnbc.com) divider line
    More: Obvious, Fiscal year, Peloton CEO Barry McCarthy, Peloton's sixth consecutive quarter, Million, Cash flow, Income statement, fiscal fourth quarter, Churn rate  
•       •       •

772 clicks; posted to Business » on 25 Aug 2022 at 9:37 AM (13 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



44 Comments     (+0 »)
View Voting Results: Smartest and Funniest
 
2022-08-25 9:02:18 AM  
There's nothing wrong with demanding constant growth and returns on investments from companies like this, shut up capitalism can hear you.
 
2022-08-25 9:17:04 AM  
cdn.cnn.comView Full Size
 
2022-08-25 9:55:08 AM  
Six quarters of losses. How can that happen? They make a decent margin of riskless revenue off of the subscription services. Having over a billion dollars in inventory is frankly baffling in the age of JIT. You would think that seasonal changes in sales would be more easily adjusted for. The markup on their hardware is outrageous - so I have a hard time believing that they aren't getting a tremendous revenue stream from new sales regardless of inventory build-up.

That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.
 
2022-08-25 9:58:15 AM  
What?!? You're kidding me!  Peloton is still in business?
 
2022-08-25 9:58:47 AM  

madgonad: That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.


They bought into their own bullsh*t and kept ramping up production (inventory) like their sales would NEVER go down.

Add in the treadmill thing and the end of the pandemic and you have a fad company going boom.

A smart CEO would have banked company money and planned for an eventual return to a niche market, which is what they are. But the majority of executives these day just want the quick cash and leave.
 
2022-08-25 10:08:20 AM  

eKonk: What?!? You're kidding me!  Peloton is still in business?


Yeah, shocking everyone who said they'd be bankrupt in a year.

They actually have a decent product, and people love spin classes, but I never thought it was enough to build a company around. I thought they'd be snapped up by a larger company to be a subsidiary.
 
2022-08-25 10:15:26 AM  
You can get clothes hangers from Target for about tree fiddy.
 
2022-08-25 10:15:49 AM  

inglixthemad: They actually have a decent product, and people love spin classes, but I never thought it was enough to build a company around.


It was enough to build a small company around, but then they went and thought they were a big company.
 
2022-08-25 10:16:30 AM  

NewportBarGuy: madgonad: That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.

They bought into their own bullsh*t and kept ramping up production (inventory) like their sales would NEVER go down.

Add in the treadmill thing and the end of the pandemic and you have a fad company going boom.

A smart CEO would have banked company money and planned for an eventual return to a niche market, which is what they are. But the majority of executives these day just want the quick cash and leave.


I just checked their income statements.

It isn't just overproduction. Their cost of revenue (making / distributing) their products is about half of their problem. The other half is operating expenses. Their revenue has only taken a small hit (maybe 7%)
 
2022-08-25 10:18:31 AM  

madgonad: Six quarters of losses. How can that happen? They make a decent margin of riskless revenue off of the subscription services. Having over a billion dollars in inventory is frankly baffling in the age of JIT. You would think that seasonal changes in sales would be more easily adjusted for. The markup on their hardware is outrageous - so I have a hard time believing that they aren't getting a tremendous revenue stream from new sales regardless of inventory build-up.

That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.


When a company like that goes public, it's usually designed to fleece the rubes.  The plan is working to perfection.  Next the shares will be shorted to oblivion and the hedge funds will walk away with free money.
 
2022-08-25 10:19:07 AM  

inglixthemad: I thought they'd be snapped up by a larger company to be a subsidiary.


That's what happened with one of their competitors. Myx, I think? Beachbody purchased/merged with them and rolled the bike workouts into their on-demand platform.

But they're a company that's been around for years doing the slow-growth thing, not snatching up billions in venture capital and blowing through it like a house fire.

/Their subscription service is actually really well done.
//Minus having to sit through the ads in order to get the completed check mark
 
2022-08-25 10:20:28 AM  

Wave Of Anal Fury: inglixthemad: They actually have a decent product, and people love spin classes, but I never thought it was enough to build a company around.

It was enough to build a small company around, but then they went and thought they were a big company.


Yeah, C19 did that to a lot of companies. Taking all those people who went to spin class at the gym and keeping them home...

For those who don't think that's a lot of people... spin classes in many gyms are so insanely popular you have to show up 30 minutes early. Yes, that fracking popular. My wife got a Peloton because she hated getting there (only) 15 minutes early because of a meeting, and not being able to take the class.
 
2022-08-25 10:23:11 AM  
Apparently their products are overpriced and their subscriptions are overpriced. Unless you really manage that well, like Apple, you can't keep it going.
 
2022-08-25 10:31:18 AM  
as the company grinds through its turnaround plan

Turnaround plan?  They have one business model - sell expensive exercise bikes that have no value unless users sign up for a recurring subscription.  Good luck tweaking that.
 
2022-08-25 10:31:26 AM  

madgonad: NewportBarGuy: madgonad: That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.

They bought into their own bullsh*t and kept ramping up production (inventory) like their sales would NEVER go down.

Add in the treadmill thing and the end of the pandemic and you have a fad company going boom.

A smart CEO would have banked company money and planned for an eventual return to a niche market, which is what they are. But the majority of executives these day just want the quick cash and leave.

I just checked their income statements.

It isn't just overproduction. Their cost of revenue (making / distributing) their products is about half of their problem. The other half is operating expenses. Their revenue has only taken a small hit (maybe 7%)


That is... that's... wow.

That is a f*cking horribly managed company.
 
2022-08-25 10:35:46 AM  

NewportBarGuy: A smart CEO would have banked company money and planned for an eventual return to a niche market, which is what they are.


True. But then they would have been promptly shiatcanned by the board during the growth period for failing to maximize shareholder value every quarter. Because companies only exist in three month wide windows of time.
 
2022-08-25 10:35:59 AM  

inglixthemad: For those who don't think that's a lot of people... spin classes in many gyms are so insanely popular you have to show up 30 minutes early. Yes, that fracking popular. My wife got a Peloton because she hated getting there (only) 15 minutes early because of a meeting, and not being able to take the class.


That's nuts.  I've gone through a number of stationary bikes through the years (five of them), and when I added up the total cost once, it amounted to half of a single Peloton at its original price.
 
2022-08-25 10:37:04 AM  

NewportBarGuy: madgonad: NewportBarGuy: madgonad: That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.

They bought into their own bullsh*t and kept ramping up production (inventory) like their sales would NEVER go down.

Add in the treadmill thing and the end of the pandemic and you have a fad company going boom.

A smart CEO would have banked company money and planned for an eventual return to a niche market, which is what they are. But the majority of executives these day just want the quick cash and leave.

I just checked their income statements.

It isn't just overproduction. Their cost of revenue (making / distributing) their products is about half of their problem. The other half is operating expenses. Their revenue has only taken a small hit (maybe 7%)

That is... that's... wow.

That is a f*cking horribly managed company.


Yup.  If you want a textbook case for activist shareholders pushing out management, Peloton would be near the top of that list.  They really do have a great product AND good margins yet somehow manage to lose money.  It's bizarre that their CEO hasn't been fired into the sun by revolting shareholders yet.
 
2022-08-25 10:46:17 AM  

OptionC: NewportBarGuy: madgonad: NewportBarGuy: madgonad: That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.

They bought into their own bullsh*t and kept ramping up production (inventory) like their sales would NEVER go down.

Add in the treadmill thing and the end of the pandemic and you have a fad company going boom.

A smart CEO would have banked company money and planned for an eventual return to a niche market, which is what they are. But the majority of executives these day just want the quick cash and leave.

I just checked their income statements.

It isn't just overproduction. Their cost of revenue (making / distributing) their products is about half of their problem. The other half is operating expenses. Their revenue has only taken a small hit (maybe 7%)

That is... that's... wow.

That is a f*cking horribly managed company.

Yup.  If you want a textbook case for activist shareholders pushing out management, Peloton would be near the top of that list.  They really do have a great product AND good margins yet somehow manage to lose money.  It's bizarre that their CEO hasn't been fired into the sun by revolting shareholders yet.


The Founder left at the beginning of the year. The new CEO inherited this mess. He wants to focus on the service, so expect a quality drop since their new product lines are made by third parties.
 
2022-08-25 10:48:01 AM  
Peloton is like Uber. They have a lot of people paying a subscription and that subscription practically cannot lose money as long as the they are smart about it. (Similarly if Uber simply focused on taking their 30% cut of every ride, and maintaining the app, they'd have almost no way to lose money - their losses as because of everything else). Peloton's losses are because of massive overextension that made no sense (COVID was *going to end* at some point) except as a sacrifice to the "We MUST grow no matter what!" Wall Street dream, when they could be sitting back and raking in monthly subscriptions indefinitely. They also have a bunch of classes as part of their subscription that likely cost them money but bring almost no revenue in terms of additional subscribers (how many people use Peloton Meditation?), that factors into that overextension.

Even without the treadmill issue, if they were willing to simply accept steady and consistent profits, they'd be profitable forever. But Wall Street demands infinite growth, and doesn't accept the possibility of market saturation, and thus Peloton is where it is.
 
2022-08-25 10:49:17 AM  
An exercise bike with a very small television duct taped to the front... Peloton's main problem is that they've developed a technology that belongs somewhere in the distant future, it is too advanced, too complex, for society as it is now.
 
2022-08-25 11:16:18 AM  

Wave Of Anal Fury: inglixthemad: For those who don't think that's a lot of people... spin classes in many gyms are so insanely popular you have to show up 30 minutes early. Yes, that fracking popular. My wife got a Peloton because she hated getting there (only) 15 minutes early because of a meeting, and not being able to take the class.

That's nuts.  I've gone through a number of stationary bikes through the years (five of them), and when I added up the total cost once, it amounted to half of a single Peloton at its original price.


Ask others, you've got me. I will note that many of the spin bikes my wife looked at were about 1/3 of the cost of a Peloton, without any electronics. Yeah, good spin bikes get expensive quick just like anything else. My BiL's kid does extreme ironman competitions like the Norseman (and similar) and his spin bike (one you would use in a gym) cost what my wife's Peloton cost. His treadmill cost more than my Landice treadmill by far, because it's a commercial treadmill.

Of course he and his wife are fitness fanatics. They have a home gym now that would rival most professional gyms.
 
2022-08-25 11:23:52 AM  

Wave Of Anal Fury: inglixthemad: For those who don't think that's a lot of people... spin classes in many gyms are so insanely popular you have to show up 30 minutes early. Yes, that fracking popular. My wife got a Peloton because she hated getting there (only) 15 minutes early because of a meeting, and not being able to take the class.

That's nuts.  I've gone through a number of stationary bikes through the years (five of them), and when I added up the total cost once, it amounted to half of a single Peloton at its original price.


This assumes that a) Pelotons last forever and b) the subscription is free.  Neither of which is true.
 
2022-08-25 11:24:05 AM  

inglixthemad: Of course he and his wife are fitness fanatics. They have a home gym now that would rival most professional gyms.


I did in our old house.  Bike, treadmill, multiple benches, barbells/dumbbells, Roman chair.  House we just moved into only has a small spare room, so it just has Roman chair, treadmill, and my wife's elliptical.  Instead of stationary bike, I just go on walks every morning, and I've replaced the free weights with resistance bands.  I was probably going to phase out the free weights anyway -- getting a bit older, and the bands are easier on my joints.

Once it cools off this fall, I'm going to see if I can take the weights/benches and set them up in the garage.  Or I may just sell it all and stick with the bands.  We'll see.
 
2022-08-25 11:25:48 AM  

Benevolent Misanthrope: Wave Of Anal Fury: inglixthemad: For those who don't think that's a lot of people... spin classes in many gyms are so insanely popular you have to show up 30 minutes early. Yes, that fracking popular. My wife got a Peloton because she hated getting there (only) 15 minutes early because of a meeting, and not being able to take the class.

That's nuts.  I've gone through a number of stationary bikes through the years (five of them), and when I added up the total cost once, it amounted to half of a single Peloton at its original price.

This assumes that a) Pelotons last forever and b) the subscription is free.  Neither of which is true.


I know the sub isn't free.  I've wondered, though, how durable they are.  My first bike, the most expensive at around $700, lasted around 9 years, I think.  I've cheaped out on the others, though, so I've only gotten a couple years out of each of them.
 
2022-08-25 11:36:36 AM  

Wave Of Anal Fury: Benevolent Misanthrope: Wave Of Anal Fury: inglixthemad: For those who don't think that's a lot of people... spin classes in many gyms are so insanely popular you have to show up 30 minutes early. Yes, that fracking popular. My wife got a Peloton because she hated getting there (only) 15 minutes early because of a meeting, and not being able to take the class.

That's nuts.  I've gone through a number of stationary bikes through the years (five of them), and when I added up the total cost once, it amounted to half of a single Peloton at its original price.

This assumes that a) Pelotons last forever and b) the subscription is free.  Neither of which is true.

I know the sub isn't free.  I've wondered, though, how durable they are.  My first bike, the most expensive at around $700, lasted around 9 years, I think.  I've cheaped out on the others, though, so I've only gotten a couple years out of each of them.


My wife rides her Peloton about every day averaged out. The bike is at least seven years old, and no issues of durability. We are obsessive about taking care of our stuff.
 
2022-08-25 11:40:56 AM  
Fark user imageView Full Size
 
2022-08-25 11:42:37 AM  

Wave Of Anal Fury: I know the sub isn't free.  I've wondered, though, how durable they are.  My first bike, the most expensive at around $700, lasted around 9 years, I think.  I've cheaped out on the others, though, so I've only gotten a couple years out of each of them.


We have one and based on my own observations they're built pretty solidly.  And from what I recall in our pre-purchase research, the build quality was rated pretty highly compared to other higher end models, including commercial ones.  Of course ultimately we'll have to wait and see.

I think the service is pretty great.  I still like going outside for rides, runs, or hikes when I can and the weather allows, but the Peloton has been pretty great with how my (and the kids) schedule has changed since Covid.

That said, I still can't grasp how they didn't see the obvious reduction of growth as things opened back up and people went back to their old routines.
 
2022-08-25 11:44:09 AM  
Good to see that they're durable for the cost.  It would be pretty awful if they're that expensive and only last a short period of time.
 
2022-08-25 12:11:22 PM  

Wave Of Anal Fury: Good to see that they're durable for the cost.  It would be pretty awful if they're that expensive and only last a short period of time.


Just as a reality check, for reference these also last forever.

bidnextdoorimages.s3.amazonaws.comView Full Size
 
2022-08-25 12:16:14 PM  

sirrerun: Wave Of Anal Fury: Good to see that they're durable for the cost.  It would be pretty awful if they're that expensive and only last a short period of time.

Just as a reality check, for reference these also last forever.

[bidnextdoorimages.s3.amazonaws.com image 850x850]


And currently priced about the same as a Peloton, after googling the brand.

Looks similar to the one my grandmother had when I was a kid.
 
2022-08-25 12:31:50 PM  
The basic bike is $40 a month for 40 months BEFORE the $44 a month basic subscription to use it.  The upgraded bike is $75 a month for 43 months.  Or you can get a bowflex bike for half the cost of the upgraded model that has built in bluetooth for free classes on YouTube.   Or you can go to Planet Fitness for $15 a month, get similar classes, and have 100 other machines  and classes covered in the $15 as well.

Its a bad business model selling a product that is no longer special and expects you to pay for  brand prestige that no longer exists (see Ryan Reynolds parody cell phone ad).
 
2022-08-25 1:18:27 PM  

madgonad: Six quarters of losses. How can that happen? They make a decent margin of riskless revenue off of the subscription services. Having over a billion dollars in inventory is frankly baffling in the age of JIT. You would think that seasonal changes in sales would be more easily adjusted for. The markup on their hardware is outrageous - so I have a hard time believing that they aren't getting a tremendous revenue stream from new sales regardless of inventory build-up.

That leaves wasteful advertising and excessive executive compensation / facilities as the cause of their losses.


So they sell, or sold, a lot of the equipment at a loss to get people on the subscription model. Basically it was, "here buy our bike, sign up for 2 years, we will give you 0% financing on it" and they would about break even ON THE HARDWARE.

Except if you don't keep up on your subscription after that, they made no money off you, and, well, lost it on the actual platform itself.

We have one, and its actually a really good bike, and i say that as someone who cycles. There really isn't anything they can do on it where i'd go, "Hmmm, i should upgrade"

Once you get beyond the gamification of the platform though, there really isn't anything else special about the platform itself. Plenty of free apps folks can use, i can get all my biometrics i want when i'm on their bike, or a real bike and combine them, etc.

Also its exercise gear, and was a fad for a bit. Retention is a biatch in stuff like that.

They should have been selling the bikes at a premium, and the platform at just break even. They also fell into some bad publicity and had to do a huge recall on their treadmill stuff. I tried one of them out, and it too was honestly an awesome treadmill, one of the best i have run on. I just don't do enough running to justify the premium price on it, and am fine getting my jogs in at the gym when the weather is shiat.
 
2022-08-25 1:21:58 PM  

Bread314: The basic bike is $40 a month for 40 months BEFORE the $44 a month basic subscription to use it.  The upgraded bike is $75 a month for 43 months.  Or you can get a bowflex bike for half the cost of the upgraded model that has built in bluetooth for free classes on YouTube.   Or you can go to Planet Fitness for $15 a month, get similar classes, and have 100 other machines  and classes covered in the $15 as well.

Its a bad business model selling a product that is no longer special and expects you to pay for  brand prestige that no longer exists (see Ryan Reynolds parody cell phone ad).


I bought mine about 2 and a half years ago, so am not sure how models have changed. I think i was all in at like 2k for it, which included shoes for wife and myself, a whole bunch of sensors, and some other nonsense. Its honestly a hell of a bike for that price.

I'm not sure what is different on the newer models, but i really don't see what they could have added to the one i have that would make me go, "Oh, i'll spring for that" other than maybe being able to cast other stuff to the touchscreen (which as far as i know they haven't done).

The subscription is 44 bucks now? Man, i gotta go check my credit card. I want to say i was paying 15 or 20 for it, and thought that is what i was. Even as someone who uses it a few times a week, no way is their platform worth 50 bucks a month.
 
2022-08-25 1:26:22 PM  

Wave Of Anal Fury: I know the sub isn't free.  I've wondered, though, how durable they are.  My first bike, the most expensive at around $700, lasted around 9 years, I think.  I've cheaped out on the others, though, so I've only gotten a couple years out of each of them.


Like i said, i can't speak for whatever the current models are, but the one i got almost 3 years ago is a tank. On par or better than high end bikes which cost even more, because, well, they took a loss on them.

Even the accessories they brand on were top notch. I bought shoes for them so i had indoor pairs, and they were honestly nicer than my high end shoes i use on my road bike, which cost like 3x as much.

My only complaint is how walled garden it is. I'd pay good money to be able to cast stuff to the screen other than their app but still have it log my data.
 
2022-08-25 1:29:39 PM  

G. Tarrant: (Similarly if Uber simply focused on taking their 30% cut of every ride, and maintaining the app, they'd have almost no way to lose money - their losses as because of everything else).


The problem, at least by me with uber, is ride quality has significantly gone down, while costs have gone up.

In the good old days, it blew away a car service to the airport or dinner. Half the price, nicer cars, short scheduling, etc.

Now i get a guy who rolls up in a beater 10 minutes late, pay more than a car service, has god awful music on, can't drive for shiat, etc.

I still use uber\lyft for going out to dinner or whatever and we want to have a few drinks, but i'm back on regular car services for the airport or planned stuff, taxi's in the city, etc.
 
2022-08-25 1:47:14 PM  
I bought a ProForm elliptical last year based on reviews. It came with a free one-year subscription to iFit. Large range of workouts that encourage while taking you on runs through Taiwan, D.R., Romania. I highly recommend this service over Peloton's screaming.
 
2022-08-25 2:30:19 PM  

What in The: I bought a ProForm elliptical last year based on reviews. It came with a free one-year subscription to iFit. Large range of workouts that encourage while taking you on runs through Taiwan, D.R., Romania. I highly recommend this service over Peloton's screaming.


I have a NordicTrack treadmill. I buy my iFit membership around Black Friday, so it's usually 40% off. People can also get cheap codes off eBay, I've heard. I enjoy it more than Peloton, just because watching someone run in a studio is boring, but running around different countries and locations is much more interesting. Not to mention the changing speed and incline, make it more immersive than watching someone in a studio. I know some people are all about the music, and that's cool for them. Just not usually something that motivates me.

I have used Peloton for yoga and strength, but thinking about cancelling more and more.
 
2022-08-25 3:49:54 PM  
Any of you looking for home exercise gear for strength and cardio might want to check out rowing machines - the Concept II is the same one used by Olympic athletes and is only $900 straight from the manufacturer, has a very clever little computer in it to show workouts. and a handy app that ties to the computer that logs workouts. It's lightweight, assembles in about 10 mins and has a 30 second takedown time and/or setup time if you want to clear it away into a closet because you need the space for something else. Full body cardio and strength endurance workout.

No built in TV, but you can set it up in front of one and use Bluetooth headphones to watch a show/movie while you're at it.
 
2022-08-25 3:51:04 PM  

What in The: I bought a ProForm elliptical last year based on reviews. It came with a free one-year subscription to iFit. Large range of workouts that encourage while taking you on runs through Taiwan, D.R., Romania. I highly recommend this service over Peloton's screaming.


Not sure what you're referencing with the screaming. There are a ton of different hosts with different teaching styles. I haven't run into any Id call "screaming." And there are the scenic rides, guided, solo, or pedal to progress. And the Lanebreak video game thing is kind of cool to mix it up.

I haven't really done anything outside the cycling to form an opinion on their running,  yoga, boxing, etc. classes.
 
2022-08-25 5:21:56 PM  

Russ1642: Apparently their products are overpriced and their subscriptions are overpriced. Unless you really manage that well, like Apple, you can't keep it going.


Some business guru (Scott ????) kept urging Apple to buy Peloton, calling it the perfect match for just those reasons.
 
2022-08-25 5:57:03 PM  

LineNoise: Like i said, i can't speak for whatever the current models are, but the one i got almost 3 years ago is a tank.


The actual bike is pretty much the same between the 2 models they offer.  All of the "upgrades" are mostly technology related.  Bigger screen, which also rotates 180 degrees for non-bike workouts. Newer processor, more ram, yadda yadda.  Better sound and camera.  Most of the improvement is in the screen.  It also offers Apple Gymkit connectivity, and automated resistance adjustments.  So while the upgrades are nice, they're hard to justify another $1k for.
 
2022-08-25 10:20:34 PM  

Joey Jo Jo Jr Shabadu: LineNoise: Like i said, i can't speak for whatever the current models are, but the one i got almost 3 years ago is a tank.

The actual bike is pretty much the same between the 2 models they offer.  All of the "upgrades" are mostly technology related.  Bigger screen, which also rotates 180 degrees for non-bike workouts. Newer processor, more ram, yadda yadda.  Better sound and camera.  Most of the improvement is in the screen.  It also offers Apple Gymkit connectivity, and automated resistance adjustments.  So while the upgrades are nice, they're hard to justify another $1k for.


The Bike+ has an actual power meter instead of inferring power from cadence and resistance and assuming some level of calibration for both.  If you're into road cycling, this is huge.  If not, meh.
 
2022-08-26 8:25:00 AM  
The company's shares declined more than 20% - a day after the stock surged more than 20%

So it's a wash?
 
Displayed 44 of 44 comments

View Voting Results: Smartest and Funniest

This thread is closed to new comments.

Continue Farking




On Twitter


  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.