Peloton's IPO and Favorite Playlist


...is apparently a hit in South Central.

Wednesday, August 28th | Issue No. 94

MARKET MOVES...

S&P 500: 2,869.16 -9.22 (-0.32%)

Dow Jones: 25,777.90 -120.93 (-0.47%)

Nasdaq: 7,826.95 -26.79 (-0.34%)

PRE-MARKET PLAY...

Little Brother - "Everything"

WHEN THE RUNNING MAN GOES OUT OF STYLE...

You get a bike and say baby, let's cruise.

Fitness and media company, Peloton, has been cruising like a '64 Impala on Slauson with its rising popularity but started set trippin' after some major numbers were revealed just before it's coming $500MM IPO.

WHY THIS IS HAPPENING...

Peloton created a dope product and raving fans which has led to sales numbers that you would think would have the fitness OGs sittin' pretty. However, the $2,000 bikes and 500,000 user base hasn't helped the company avoid a 4X net loss ($245MM in 2019 compared to $48MM in 2018) despite increasing revenue from $435MM to over $900MM. How Sway? Well, for starters, sales and marketing expenses doubled up to over $320MM this year not to mention the money it shells out for boost in money spent on music royalties that complement its 950 programs that make it do what it do. Another red flag is the dual-class stock situationship where there will be class A and B shares with a voting ratio of 20:1, respectively.

THE RETURN...

Peloton plans to list on the NASDAQ under the stock symbol "PTON".

KEEPIN' IT REAL...

Dual-class stock is primarily a tactic companies use to make sure they maintain Janet Jackson level control. Typically, one class of shares has more voting rights than the other class, even if the amount of ownership is still small, and the one with less voting rights is usually the one distributed to the public in the stock market.

Want to know what an IPO is? Check out Issue No. 85.

JUMPIN' ON A JET...

Is what Future did since most airlines flights have been grounded this past summer.

The airline industry has been taking a hit and American Airlines (NASDAQ: AAL) is no exception. But it's decided to at least show customers that it can get them higher in the future but putting numbers on the boards and frequent flyers are saying one thing.

WHY THIS IS HAPPENING...

Airlines have been having to pump the brakes on many flights due to some issues with Boeing (NYSE: BA) 737 planes that have prevented them from turning up. American specifically has been dealing with a labor dispute from its mechanics further sending the stock to Marvin's Room forcing it to still think about the times it's had with its customers. To help lighten the mood, American's customer service team has been contacting customers to apologize and offering compensation, typically in the form of frequent flyer miles.

THE RETURN...

American Airlines' stock is down 25% so far this year.

KEEPIN' IT REAL...

Nothing to see here.

OOOH I'M A KILL'EM IN THE MORNING...

With this fresh financial fabric. Have you grabbed your Invest tee yet?

Visit our shop and enter code 'PAPER10' to get 10% off your order.

MORE PAPERTRAILS...

DID YOU KNOW...

"In God We Trust" wasn't added to bills until 1963. (via Fact Retriever)

WHO'S GOT NEXT...

Companies reporting earnings today about how much paper they're stackin' (or losing) and new things to come:

  • H & R Block (NYSE: HRB)

  • Five Below (NASDAQ: FIVE)

  • Shoe Carnival (NASDAQ: SCVL)

  • Tiffany & Co (NYSE: TIF)

  • Express (NYSE: EXPR)

SHOW SOME LOVE...

Have a great financial tip to share or a question that Sway can't answer? Reply to this email with your tip or question, and it could be featured in a future issue.

Dr. Eric Patrick

Writer | Companion Passer

Learn How to Invest in 5 Days

Disclosure: This editorial is by no means a solicitation to buy or sell any of the above-mentioned securities. It is merely a means for educational purposes. All investors are subject to their own research and due diligence. This post may contain affiliate links and we may receive commissions for purchases made through links in this post.

#investing #papertrail #peloton #americanairlines

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