Recent high flying unicorn companies like We Work and Uber have not had an easy road to the public markets. But Peloton looks like it is gliding to Wall Street.
The fitness startup is best known for on-demand workouts available on high-priced exercise bikes and treadmills priced its IPO Wednesday night at $29 a share according to Reuters —the high end of the original $26-$29 price range. The offering raises $1.16 billion and values the trendy digital fitness company at $8.2 billion. Peloton sold 40 million Class A shares, in line with original projections.
Despite this good fortune — compared to the likes of We Work, which was forced to postpone its IPO and ousted its CEO and founder — Peloton is facing a bit of an obstacle course as well. For the year ended June 30, Peloton's revenue more than doubled to $915 million but net losses widened to $195.6 million from $47.9 million as costs continued to grow for marketing and sales to attract new customers.
In addition, the company is in a legal battle with 10 music publishers and artistic groups, which accuse Peloton of using of more than 2,200 songs without paying a license fee. The lawsuit is asking Peloton for $300 million.