The connected fitness maker recently set its IPO range.
The fitness maker Peloton is planning to go public and just last week, the company set its IPO range. The company will offer 40 million shares priced between $26 and $29.
This would price the company at just over $8 billion, doubling its current $4 billion valuation. The company plans to trade its shares on Nasdaq under the ticker “PTON.”
Peloton is known for selling connected fitness equipment like exercise bikes and treadmills. It also sells a digital subscription for fitness classes.
The company’s compelling business model makes it an exciting IPO to watch but challenges do lie ahead. Here are a couple of things to know about the Peloton IPO.
Peloton’s losses are widening
When Peloton initially filed paperwork with the SEC last month, it showed that the company is growing at a very fast pace. However, it seems to be losing money just as quickly.
Most of Peloton’s revenue comes from sales of its fitness equipment and customer subscriptions. However, it also has to pay heavy sales, marketing, and licensing fees to keep all this up.
The company reported $245.7 million in net losses in fiscal 2019. This is four times as much money as the company lost in 2018.
The music lawsuit isn’t going away
The National Music Publisher’s Association filed suit against the company back in March. It is claiming Peloton has used more than 1,000 unlicensed songs in its workouts.
And most recently, the NMPA amended the lawsuits to include an additional 1,300 unlicensed songs. It is also seeking damages to the tune of $300 million.
When Peloton first filed for its IPO, it noted that music is a very important aspect of the content it offers its subscription customers. If the lawsuit continues to ramp up, this could negatively affect the company’s business.
However, Peloton does plan to fight the lawsuit and referred to the NMPA as “anti-competitive.” The company released a statement saying that the music it used was developed in collaboration with “trusted music partners.”
The statement concluded, “We will continue to defend ourselves against claims made in this matter and look forward to pursuing our counterclaims.”
The IPO could happen soon
In spite of the challenges that lie ahead, it appears the Peloton IPO will proceed as planned and could happen very soon. According to Bloomberg, the IPO could happen as soon as this Wednesday.