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Peloton – A call for action [pdf]

blackwellscap.com

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Re: Peloton – A call for action [pdf]

#191

Post by shmatt »

The fact is. Not every company can be a $12B company. Peloton might be a super successful $1B company, who slowly tries to creep into new areas for growth.

And it sounds like Blackwell understand this, and instead of pushing for Peloton to focus internally on its product and get rid of the extra fat, they want a fast sale to a not-really-smart company. So they can at least get some ROI

People talk about monthly fees being high or fair, thats not it at all, Pelotons prices for hardware and membership or completely fine. What they did do is

* Pouring money into building their own factories (even Apple doesn't do this at their scale, they pay Foxconn)

* Building a full fledged apparel brand

* Hiring way too many engineers, FAANG level org size

* Having their own warehouses and delivery full time employees

No other company does this. I'm not sure what the long term plan was, maybe they become a white label manufacturer for other start ups? It failed, badly

You do not need 14,000, or 11,000, or 3,000 employees to do what Peloton currently does (again, maybe they had grandiose plans in the pipeline). If we want to compare proprietary hardware + Android + online streaming service. When MIRROR was bought out by Lululemon for $500M, they had 200 employees

I have a feeling no one has offered Foley more than $3B for the company, and i'm being generous

Re: Peloton – A call for action [pdf]

#192

Post by BoorishBears »

slingnow wrote: post #163
AndrewOMartin wrote: post #90

Earlier quoted context omitted.

Agreed, apart from the fact that their treadmill kills kids, their products are exemplary.

Exemplary? Have you even tried other stationary bikes? You can get a BETTER stationary bike for less than the cost of a Peloton bike.

The fact you called it a stationary bike is kind of telling.

There's two kinds of people:

People who actually know what equivalents to Peloton hardware cost

... and people who think the hardware is overpriced

-

Powered slatted treadmills started at around $15,000 when the original Tread launched at $4,000

Spin bikes can be $200... they can also be well over $2000, and the Peloton has more in with the over $2,000 models than the $200 Alibaba special.

Re: Peloton – A call for action [pdf]

#193

Post by ranrotx »

shmatt wrote: post #191

The fact is. Not every company can be a $12B company. Peloton might be a super successful $1B company, who slowly tries to creep into new areas for growth. And it sounds like Blackwell understand this, and instead of pushing for Peloton to focus internally on its product and get rid of the extra fat, they want a fast sale to a not-really-smart company. So they can at least get some ROI People talk about monthly fees…

Their apparel brand is a joke. It’s run by Foley’s wife. Unless I messed something, what experience or qualification does she have in apparel?

Never mind the fact that I’ve maybe seen only 3 people in the real world wearing anything that is Peloton branded (no, the free Century t-shirt doesn’t count).

Personally, I find their apparel to be a little loud and obnoxious, but that’s just me. As a consumer, I don’t see what value they bring to the apparel market. Nothing new, just branding.

Re: Peloton – A call for action [pdf]

#194

Post by anthony_r »

darkerside wrote: post #115
ansible wrote: post #107

Earlier quoted context omitted.

> The main job of the CEO is to manage the board of directors (i.e. the shareholders). Uh, no. Dealing with the board is indeed part of the job for the CEO, but a relatively small part unless you're doing poorly. The CEO is also managing the direction of the company, and managing the top-level managers of the various departments. The CEO has to fight the fires, and allocate limited resources to where they are needed…

You're right, but I think parent was joking

Half-joking, but yeah. "Managing the board of directors" of course means keeping the board happy, which is done by what ansible wrote. Not just directly trying to talk them out of firing the CEO.

Re: Peloton – A call for action [pdf]

#195

Post by usrusr »

bla3 wrote: post #102
fabian2k wrote: post #27

I get the impression they don't like the CEO very much. That was an impressively brutal attack on him, with probably the worst damage inflicted by the CEO's own statements. Blackwells is obviously not a neutral party here, there's a reason they created this thing. But on first glance it looks like a pretty solid argument that the management at Peleton is seriously flawed. I don't really buy the arguments on why Pelet…

Matt Levine made the point that the CEO has enough shares to control the board, so the point of this deck was to convince _the CEO_ that he no longer wants his job. It worked: he stepped down, and PTON was up 5% on the news.

Oh, interesting plot twist! And it makes so much sense, because if the potential buyers listed were the intended audience, the tone would seem a little condescending: too much "they might fall for it" badly hidden between the lines of "that would be a good acquisition for them"

Re: Peloton – A call for action [pdf]

#196

Post by missedthecue »

shmatt wrote: post #191

The fact is. Not every company can be a $12B company. Peloton might be a super successful $1B company, who slowly tries to creep into new areas for growth. And it sounds like Blackwell understand this, and instead of pushing for Peloton to focus internally on its product and get rid of the extra fat, they want a fast sale to a not-really-smart company. So they can at least get some ROI People talk about monthly fees…

Why would Blackwell buy into a $12B company in order to make it a $1B company?

It might make peleton live longer but it would lose a lot of money for their LPs

Re: Peloton – A call for action [pdf]

#197

Post by toomuchtodo »

missedthecue wrote: post #196
shmatt wrote: post #191

The fact is. Not every company can be a $12B company. Peloton might be a super successful $1B company, who slowly tries to creep into new areas for growth. And it sounds like Blackwell understand this, and instead of pushing for Peloton to focus internally on its product and get rid of the extra fat, they want a fast sale to a not-really-smart company. So they can at least get some ROI People talk about monthly fees…

Why would Blackwell buy into a $12B company in order to make it a $1B company? It might make peleton live longer but it would lose a lot of money for their LPs

From Matt Levine’s Money Stuff piece on this:

> In a sense, the pitch here is straightforward. Blackwells does not think that Foley is very good at running Peloton. The stock market does not think that Foley is very good at running Peloton, in that the stock is down 80% from its highs last year and spent last week below its 2019 initial public offering price of $29. (It’s up today.) And Foley does not think he’s particularly good at running Peloton, at least if you believe the quotes that Blackwells selected here. If someone else takes over the day-to-day running of Peloton, or the process of selling it to a better owner (and Blackwells is also pushing for a sale), then Foley will have more money (because he owns a lot of Peloton stock) and also more free time (because he’s not running Peloton). It is no fun to do a job that you’re not good at, particularly when doing that job costs you money. If you can get in a room with Foley, or just lob a PowerPoint deck at him, and explain “hey, everyone is mad at you, you’re not having fun and it’s making you poorer,” that’s fairly persuasive and maybe he’ll listen. He did!

Sidenote: I suggest subscribing to Money Stuff. It’s a free email newsletter, and Matt’s writing is stellar.

Re: Peloton – A call for action [pdf]

#198

Post by dlp211 »

brailsafe wrote: post #164
CamperBob2 wrote: post #74

Earlier quoted context omitted.

You've never owned, or likely even used, a really good one. I don't know if Peleton makes good ones, but Precor certainly does. That said, it was weird of Peleton to overpay for a company that makes expensive fitness equipment purchased largely by gyms, who probably aren't purchasing much of anything these days.

It's not a personally derived anecdote, just an observation. I just don't see people who aren't sufficiently motivated enough to go for a real bike or workout at a gym changing their mind because they consoomed a new $$ one. I do know some people who do, but they basically have no choice in the matter but to do something in winter. It's like buying an iPad pro and expecting yourself to find an interest in illustratio…

You aren't just buying an indoor "replacement" of an outdoor activity. You are also purchasing a coach/work out buddy. It's this latter part that is the differentiator between a normal indoor trainer/treadmill and what Peloton sells.

Re: Peloton – A call for action [pdf]

#199

Post by georgeecollins »

Dual class shareholder companies are a terrible idea. Even if you believe one person should have more control for the owners, does it really make any sense for that person's heirs to have more control? People only accept it because the management has power over short term investors (VCs, people who buy the IPO) and the long term investors-- pensions, mutual funds (aka little guys) get stuck with it.

Re: Peloton – A call for action [pdf]

#200

Post by kristopolous »

scarface74 wrote: post #147
kristopolous wrote: post #58

Earlier quoted context omitted.

In spirit it's to take big bets on things that may not work; the transistor radio, the microprocessor. The eventual goal is to push forward something potentially for the social welfare such as say a logarithm table or star catalog in an earlier time. Companies like Uber or Netflix don't do this. They're platform for rent-seeking of services or durable goods (or perhaps call it "assisted living for people under 60") T…

How is Netflix “rent seeking?” They pay up front to either license or produce shows.

It's an academic economic term. Economic rent isn't the same as the common term. Taking a back catalog of content and charging for the right to view is a form of academic, economic rent. Licensing models, such as a video store, are frequently used as examples of rentierism.

I've got zero interest getting into one of those internet "debates" where a bunch of people extremely unfamiliar with concepts flex their knowledge to show me how "wrong" I am. No interest

Have a good day and forget about it

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