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Peloton stock trends down amid plan to resell refurbished bikes

Shares of Peloton sank as the company launched its new program for reselling refurbished bikes.

Video Transcript


- Now, my point today is Peloton. Shares sinking roughly off about 6% today as they launch the new Peloton Certified Refurbished Program. Now, this program offers a $300 discount for refurbished bikes, Peloton bikes, and a $500 discount on the Peloton Bike Plus. So those bikes now both still retail for over $1,000, and with the refurbished Peloton Bike now fetching just shy of $2,000.

And those price points are what really stick out to me still here, guys. When you talk about a company, investors are looking for a really positive story here, a new way to fix that revenue graph that you can see there on your screen that has been declining quarter over quarter for several quarters now. You need something new and different. I don't know if a refurbished bike that now is still increasingly expensive-- it's still very expensive. I don't think that that's what's going to bring new customers into Peloton, Pras.

PRAS SUBRAMANIAN: I can get a cheaper bike on eBay right now. Why would I want to get this? Unless they give me a warranty. They got to get this subscription revenue going. They got to get the bikes out and get people to pay $40 a month every month. And that'll-- I think-- make the company a more compelling buy, you know?

SEANA SMITH: Yeah, I think the price [? break ?] that you said we would just get with $300 to $500, I don't think that really moves the needle just in terms of getting more-- a significant number of new users into Peloton. I don't know, maybe we are wrong, but certainly, Peloton has a massive issue, because as the economy reopened, more people returned to the gym, they canceled their membership. We saw that membership number actually decrease in its most recent quarter. When you take a look at the stock performance, today alone, you're seeing that this announcement from Peloton isn't really doing much to excite the Street.

And guys, remember, this is a company that had a market valuation of nearly $50 billion in early 2021. Now, at today's price, we're looking at a market cap of just over $3 billion. So you talk about that dramatic of a drop. We know the new CEO Barry McCarthy has laid out a massive turnaround plan, but I think the big question is just the number of steps that will be needed and are necessary in order to get Peloton-- if it ever can-- recapture some of the success that we did see early stages of the pandemic.

- [? We ?] feel like they just need something else to change the story here to a post-pandemic story, right? A major gym partnership, getting into gyms in some way, getting people involved in a different way. That way, rather than, we're still selling that same product, that same bike, investors don't want to hear that story anymore, clearly.

SEANA SMITH: And it's also been [? rumor ?] [? that ?] could potentially be a takeover target, so we will see what happens with Peloton.