The Peloton Therapeutics (NASDAQ: PTON) initial public offering comes on the heels of a botched IPO from fellow unicorn WeWork, and the two companies share at least one similarity, Timothy Lesko of Granite Investment Advisors said on CNBC's "Street Signs" Thursday.
WeWork is a real estate company masquerading as a technology company to attract a valuation it "doesn't really deserve," Lesko said.
On the other hand, Peloton released enough information on subscribers for investors to build financial models off the already strong business, he said.
Like WeWork, Peloton may have waited too long to enter the public market, and itsvaluation may have risen too much throughout private rounds of financing, Lesko said.
Peloton's early investors could be first to become disappointed, while WeWork's early investors will feel the same should the stock eventually become public, he said.
Why It's Important
Lesko said he prefers buying shares of public companies with demonstrable corporate governance that are backed by a solid balance sheet. A company like WeWork is therefore eliminated from any investment decision process, as it set a "new low bar" in corporate governance, he said.
Instead of getting caught up in high-value IPOs, investors may want to consider instead investing in sectors "who have been left in the dust," Lesko said.
Investors can find "great opportunities" in energy, finance and traditional cyclical companies, he said.
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