Peloton priced its initial public offering at $29 a share, at the top of its projected price range released earlier this month. The pricing gave the provider of at-home fitness equipment and accompanying streaming fitness services, a valuation of $8.2 billion.
As it began trading Thursday morning, Peloton floated 40 million class A common shares under the PTON ticker on the Nasdaq stock exchange, raising $1.2 billion. The pricing would almost double the $4.2 billion valuation the company earned in its last private round of fundraising in August last year.
Shares opened at $27 and wound up down $3.24, or 11.2 percent, to $25.76 in the stock’s first day of trading.
In addition, the underwriters have been granted a 30-day option to purchase up to an additional 6 million shares of Class A common stock from Peloton at the initial public offering price, less underwriting discounts and commissions.
Peloton filed paperwork in August for an initial public offering. At that time it sought to raise $500 million but initial amounts often change based on investor demand. The projected pricing range was between $26 and $29 a share
Peloton sells $2,200 exercise bikes and $4,000 treadmills, equipped with 22-inch screens that beam live workouts for a $40 monthly subscription fee. The group has also launched a $20 monthly subscription for users that do not own its equipment.
Peloton’s revenues doubled to $915 million over the year to June 30, The company’s losses jumped fourfold over this period to $196 million. The company is also facing a $300 million lawsuit from a group of music publishers who claim Peloton has used songs in its workouts without paying licensing fees.
It more than doubled its connected subscribers in a year with more than 511,000 as of June 30.
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as the lead bookrunning managers for the proposed offering. Its investors include Kleiner Perkins, L Catterton and NBCUniversal.
Photo courtesy Peloton
