When share prices

fall down
What went wrong with THAT Peloton spot?
A sharp fall in
share prices
When company is growing , share
prices still falling down
ABOUT Peloton’s challenge

Peloton is a surging exercise bike company

founded in New York City in 2012. Peloton
offers many different products and services
to its United States customers. These
products and services include memberships,
bikes, exercise equipment, training
programs etc.

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 PROBLEM
What went wrong with THAT Peloton spot?

o Peloton’s ad controversy has reached such a pitch that $1.5bn

has been wiped off its value, which had reached $9.39bn
before the advert. On Tuesday its shares fell 9%, and by
lunchtime on Wednesday the shares were down another 6%.
There were reasons for fall in investment in Peloton’s shares.
Prospectus showed that there was a 99% growth for the year
2018, and 110% growth in shares; $915 million for the fiscal
year 2019.
o But at the same time 109 million USD cash has been burned
through its operations and there was a net loss of &196
million.

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 ANALYSIS

• Firstly, despite of Peloton’s high rising

share prices Peloton’s loss and cash
burn remained high.
• Secondly. It is an indication that
Peloton lacks a scalable business
model.
• Thirdly, the prices level of products is
set high by Peloton. In market,
competitors are selling products at
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lower prices with same features
 Solutions
A revised product portfolio
Or
A reengineering of business model

• Peloton to offer low priced

• Customization option must be added
• it must redesign product positioning strategy for its
products
• Focus on profitability rather than growth
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