https://qz.com/...s-a-key-risk-factor/ covers why music is such a problem for them (tl:dr they need public performance licenses for any song they play, which is a lot more expensive than what Spotify pays)

https://qz.com/...-tech-startup-trend/ more details, but lots of typical things from this round of "tech" IPOs (dual share classes, interestingly reported financials, filling with major losses, etc.)

Filing the IPO and the shares trading are two different things. Interestingly, the margins on the equipment (Bike and treadmill together) are being reported as having huge margins. Most considered no real revenue was being made here and the majority was subscription.

If you read closely, you'll see that historically they basically acquired customers with the margin from the bike.

Cost to acquire was roughly 1000... Gross margin from hardware was 43% (or 860)..so brake even was roughly 8 months after spending the dollars. They've pushed that back to 14 months in their run up to ipo to increase growth.

Now, the other fascinating thing is the 5 year old company is claiming an average customer life time of 13.5 years. While their math is right ( avg lifetime = 1/churn), most folks would be a bit more conservative, / not spend against more years then they have history.

I haven't read the filing - how do they account for used bikes? If they are using new sale bikes to fund customer acquisition it will be affected by this.

A few articles mention this, but the churn numbers are also likely optimistic since they a) don't count paused subscriptions and b) over half the current users have joined in the last year (and it's mandatory to have a subscription for the first year). Conservative is not the name of the game here.

Im suspicious on 13.5 years - Im actually surprised they would go for that. Insto investors are going to eviscerate that assumption.

Ti looks like it could be another WSG type IPO, lets see what they price it at. But 8 billion valuation, no earnings, and none in the near future, or ever? What are they hoping to sell anyway. I get the whole subscription thing, but their price seems way to high to hold members, and for 13+ years?

I heard Howard Stern talk about the product last week, he says he cant run anymore and someone talked him into this program. Seems there are very hot instructors, one lawyer who makes way more money spinning on the internet for subscribers. He is not selling the product as a spokesperson, but his recommendations usually give companies a little bump, just looks like they need a huge one.

I'm going to pass on this one, even ironman looks more promising in the future, now if that dam stock would just sink again so I can buy it back!!

We used our survey data (n=500) to calculate that their attrition data is a lot worse than that optimistic figure. It is discussed in our peloton video (http://fft.tips/vpeloton) and cost calculator (http://fft.tips/pelotoncost)

I find this fascinating. Peloton is aiming for a valuation that is $2B more than the entire U.S. bicycle market! NYU professor Scott Galloway describes three tenets of the Gig economy: explosive growth, network effects and recurring revenue (memberships). I recognize that subscriptions give Peloton recurring revenue -- pending what was said above about churn. There are network effects and they have had great growth. But warehousing and distributing (and finding customers for) a costly spin bike is a significant hurdle to overcome. Going to South America or overseas adds language and customs/tax barriers. Peloton's next foray is running. I appreciate the safety of working out in your own home, much like gravel or Zwift avoids distracted drivers. Running is not the same as cycling; it is high impact. The number of individuals with disposable income who want to or can run would be less than spin bikes. Are there elements in the prospectus that support the valuation?