Investing, Stock Market and Retirement Planning Thread

NTP66
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Postby NTP66 » Fri Jan 21, 2022 9:27 am

I don't even want to know how much those bikes cost.

MrKennethTKangaroo
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Postby MrKennethTKangaroo » Fri Jan 21, 2022 9:45 am

Peloton has the same business model as every other startup. Work hard to build a brand. They have done that, even though the Peloton brand does result in some snark. Try to get people hooked on a subscription model. Looks like they haven't gotten to that point yet. Unlike most startups, they had no choice but to deal with the pesky idea of actually building sht. In this case, it was a stationary bike that they wanted to sell at a premium. It is hard to build stuff and get a good ROI, which is why most Americans/Wall Street investors gave up on it a while ago, but I think peloton's ultimate goal was to build a big enough customer base with sticky monthly subscriptions that it wouldn't matter if they couldn't actually make money building the stupid things. They just had to raise enough money from wall street until their subscription base was big enough (i.e. building "scale"). Looks like they haven't gotten to that point. Should be interesting if wall street still believes in the brand enough to dump more money into it. If not, the peloton brand will certainly live on, and you people will still be able to watch hot chicks on little screens yelling at you to push your pace, push out all the negative energy, blah blah blah.

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Postby dodint » Fri Jan 21, 2022 9:52 am

I'm not sure the apparel line is going to be the revenue generator that they wanted, either. I bike alone in my house, that's the nature of it. I'm wearing athletic shirts I got on clearance from Dicks. :lol:

mac5155
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Postby mac5155 » Fri Jan 21, 2022 10:11 am

I find it hard to believe the bikes cost that much to manufacture. It's gotta be mostly in the screen panel? They really priced a lot of normal folks out of their bikes when they made them $1500 or whatever.

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Postby Dickie Dunn » Fri Jan 21, 2022 10:20 am

$1500 puts them in the neighborhood of most, if not all, "screened" stationary bikes. Bowflex, Echelon, NordicTrack, Sole, ProForm, Beachbody's MYX (way to be super late to the party) all have bikes running $1,400 to $2,200. The Bike+ at $2,500 is pretty ridiculous though.

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Postby Dickie Dunn » Fri Jan 21, 2022 10:24 am

I'm not sure the apparel line is going to be the revenue generator that they wanted, either. I bike alone in my house, that's the nature of it. I'm wearing athletic shirts I got on clearance from Dicks. :lol:
You're not gonna buy a $90 Peloton braded Adidas bomber jacket?

When I go through a ride I often wonder how much money they're spending on music rights.

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Postby mac5155 » Fri Jan 21, 2022 10:26 am

Remember when you could make money in the stock market?

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Postby dodint » Fri Jan 21, 2022 10:34 am

When I go through a ride I often wonder how much money they're spending on music rights.
I read somewhere that Pelton is the service that pays the most to artists per play. It was framed as "we support artists" but from an investor standpoint it sounds like they've overpaid.

https://slate.com/culture/2021/07/pelot ... music.html

MrKennethTKangaroo
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Postby MrKennethTKangaroo » Fri Jan 21, 2022 10:34 am

I find it hard to believe the bikes cost that much to manufacture. It's gotta be mostly in the screen panel? They really priced a lot of normal folks out of their bikes when they made them $1500 or whatever.
Lets put it this way:

accoridng the 6/30 financial statements, they sold $3.1 billion worth of bikes. The gorss profit on those bikes was $910 million. They sold $872 million worth of subscriptions. The gross profit on that was $542 million. So they sold 3.5x worth of bikes as they did subscrptions but only came out with 1.7x the gross profit. So no, they don't make that much off of bikes. Caveat: it was hard to build bikes (and pretty much anything else) in 2021. but it is hard to build stuff in any year. that is why we americans gave up on that sht 30 years ago and live off of services and tech.

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Postby MrKennethTKangaroo » Fri Jan 21, 2022 10:34 am

also, the gutless cowards of peloton does not disclose how much they pay in music royalties.

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Postby dodint » Fri Jan 21, 2022 10:35 am

Yeah, this time last year they were paying to airlift the bikes into the US because they couldn't get them through the ports.

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Postby MrKennethTKangaroo » Fri Jan 21, 2022 10:41 am

Yeah back in the old days of 2019, the margins on the bikes were much better (41% back then to 29% in 2021). But that still doesn't hold a candle to the 62% margins of the subscriptions. Plus, keep in mind that gross margin of that subscription is generally going to improve with more subcribers. that isn't really the case with building more bikes.

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Postby Dickie Dunn » Fri Jan 21, 2022 11:08 am

When I go through a ride I often wonder how much money they're spending on music rights.
I read somewhere that Pelton is the service that pays the most to artists per play. It was framed as "we support artists" but from an investor standpoint it sounds like they've overpaid.

https://slate.com/culture/2021/07/pelot ... music.html
I’m sure metal is cheaper than top 40. They should just make more of those.

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Postby mac5155 » Fri Jan 21, 2022 1:36 pm

One may argue they shouldn't make much if any on the bikes and focus on the subscriptions.. Sell the bikes for cheap or bundle them with a 2 year subscription. But I'm just an idiot on a penguins message board.

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Postby King Colby » Fri Jan 21, 2022 2:27 pm

You can also subscribe without their bike right? So why would I pay 2x market value of a bike that has their name on it?

Also everything they do is pretty easily replicable is it not?

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Postby MrKennethTKangaroo » Fri Jan 21, 2022 2:30 pm

You can also subscribe without their bike right? So why would I pay 2x market value of a bike that has their name on it?

Also everything they do is pretty easily replicable is it not?
I mean, what business isn't pretty easily replicable? That is why scale and brand are so important. The problem is, you need other peoples money to build scale and brand and hope that outsider investors keep on pumping money into the business until it turns the corner. It worked for amazon and its working for tesla. is it working for peloton? at the moment, no.

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Postby dodint » Fri Jan 21, 2022 2:31 pm

Only there bike does the metric recording. Without knowing what resistance/cadence you're doing the stand-alone app loses a lot of its capability. Leaderboards, performance tracking, etc. The overall experience is heightened with the Peloton equipment. You can work around that by tracking your own metrics with Garmin or Apple and save some cash, but you're not getting the full experience without a Peloton bike.

I was happy to pay the extra for the Bike+ so I could lock in the resistance; the bike changes it for me when the instructor makes the change. Not a hugely important feature but something that I value.

That said, the stand-alone subscription is only $13 a month whereas I'm paying $40 a month.

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Postby King Colby » Fri Jan 21, 2022 2:40 pm

So it's very specialized metric tracking. I can appreciate some people valuing that. Others (most) can get what they need out of their existing wearable, a functioning resistance bike, and an instructor.

PTON has a ceiling though. Theres a market cap in home fitness solutions... they'll have to expand their scope bigly

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Postby dodint » Fri Jan 21, 2022 2:45 pm

My wife and I talked about this before we bought it. Being able to just walk up to the bike and have it work was a very important feature for us. I'm getting too old to care about chasing down solutions to self-generated problems. @shoeshine boy really likes their setup and that's great, I'm not begrudging it at all. I just don't have the patience to do a more complicated setup than the stock setup.
When I ride I'm generally competing against myself; my PR for a given duration. It's integrated right there in the leaderboard and it's what drives me. You don't get that without a Peloton bike so that alone is enough for me to justify the cost.

Now, there are some huge flaws I'd love to see addressed but it's certainly easy to use.

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Postby dodint » Fri Jan 21, 2022 2:49 pm

From an investor standpoint I'd love to know how many people move from the $13/mo setup to purchasing hardware and then spending what feels like a moronic $40/mo for the same classes. That's probably the pipeline they were banking on and I can't imagine the conversion rate is as high as they would like.

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Postby King Colby » Fri Jan 21, 2022 2:51 pm

You don't have to justify your valuation of their offering... the value prop makes sense, but also limits their growth potential because there's such a significant cost savings (initial investment and service fee) tied to other similar options

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Postby mac5155 » Fri Jan 21, 2022 3:25 pm

So anyway back to the stock market.

Wow

NTP66
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Postby NTP66 » Fri Jan 21, 2022 3:27 pm

So anyway back to the stock market.

Wow
Guess I should make my monthly brokerage account purchase right now.

mac5155
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Postby mac5155 » Fri Jan 21, 2022 3:31 pm

You could've said that every day this week and it's only gotten worse.

NTP66
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Postby NTP66 » Fri Jan 21, 2022 3:38 pm

Well, I’m scheduled to make that purchase in one week, but figure I might as well do it now. If it continues to drop off, so be it.

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