High-tech fitness company Peloton will reportedly release a cheaper treadmill and a rowing machine in 2020
- Peloton is working on releasing a series of new products for 2020: a new treadmill, a rowing machine, and apps for both Amazon Fire TV and Apple Watch, according to Bloomberg.
- New equipment could cheer up Peloton users, who have complained about the company's decision to remove songs by artists like Taylor Swift and Rihanna amid a $300 million copyright infringement lawsuit.
- The company told Reuters that it was 'always working on ideas' but had no new products to announce.
- Investors seemed to like the idea, with Peloton stock surging up nearly 9% immediately following the report. It closed up 5%.
- The news may herald a turnaround for the company, which has hit several bumps recently. Peloton had the third-worst mega-IPO debut in a decade, as shares fell 11%. Its shares fell another 7% after it released its earnings report for the first fiscal quarter in 2020.
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The buzzy fitness equipment startup Peloton, known for its internet-connected exercise bikes and treadmills, may finally have some good news this year after its IPO didn't go quite to expectations.Peloton will reportedly release two new pieces of fitness equipment next year, according to Bloomberg, including a new cheaper treadmill, and a rowing machine. Peloton is also exploring options to link its smartphone software to Amazon's Fire TV and the Apple Watch, per the report. Advertisement
The news might please Peloton's fervent followers, who have been unhappy with the company lately. Peloton removed music by artists such as Taylor Swift and Rihanna on its machines, after it was hit by a $300 million copyright lawsuit in August - spurring a number of user complaints.
Peloton brands itself as more than just a fitness equipment company; it thinks of itself as a media and technology platform as well. In its filing to go public, Peloton said it has more than 500,000 paying subscribers, many of whom were willing to purchase the company's pricey $2,000 stationary bike or $4,000 treadmill, and then cough up between $19.49 and $39 per month to access its fitness classes.A cheaper treadmill, a rowing machine, and apps for Amazon Fire and the Apple Watch may signal a new phase of expansion for the company. But Peloton hasn't confirmed any plans yet.
"While our R&D team is always working on ideas, we have no new products to announce on either the software or hardware side," a company spokeswoman told Reuters. The company did not immediately respond to a request for comment.
Wall Street respondsInvestors seemed to like the idea, with shares of Peloton surging 9% immediately following the Bloomberg report, with the stock ultimately closing up about 5% at the closing bell. This is a positive change from the company's rocky stock performance over the past few months. When the company went public in September, its stock plunged 11% - the third-worst trading debut for a mega-IPO in a decade - and wiped out more than $900 million in investor value. Just last week, the company's shares plunged another 7.5% when it released its first earnings report for the first fiscal quarter of 2020, according to CNBC. Advertisement
But the company has prioritized expansion over profits, and regularly posted net losses since its 2012 founding. When Peloton said its losses had quadrupled for the fiscal year 2019, to a $245.7 million net loss ahead of its IPO, it prompted some alarm among investors.
Expanding its user base with new hardware, new apps, and a cheaper price point could help tip the scales back a little bit.
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