Peloton's shares opened at US$27 and closed down 11 per cent from their offering price to US$25.76 in NY trading, giving the company a value of US$7.2 billion.
But Peloton looks like it is gliding to Wall Street.
In filing for its IPO, Peloton described itself as a tech, media, software, retail and apparel company, as well as one that fosters social connections. Peloton closed Thursday at $25.76, or 11.2 percent below its IPO price, giving it a valuation of almost $7.2 billion. S&P could cut its credit rating again in the next year if the company struggles to get more financing, analysts wrote in a note.
Growing membership has helped Peloton's sales grow to $915 million for the fiscal year ended June 30, up 110% from $435 million in fiscal 2018. But the company also showed negative operating leverage, with operating expenses surging 147% over the prior year.
It marked the third-worst trading debut for a mega-IPO since the financial crisis a decade ago, trailing only SmileDirectClub and ADT.
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Like many startups that have gone public this year, Peloton told investors that it will stay focused on growth rather than profitability, though it outlined a path to making money.
The sports and entertainment group that owns talent agencies IMG and WME and the Ultimate Fighting Championship said it "postponed its previously announced initial public offering", and that it would "continue to evaluate the timing for the proposed offering as market conditions develop".
"It will be a dialog among bankers and boards and senior management teams where they say, 'these were isolated and not comparable, ' or say 'we have a sentiment shift and we need to be more conservative and use a different strategy, '" said David Ethridge, U.S. IPO services leader at audit firm PwC.
Over the same time period, the company also captured 5% of its addressable market and operates in just three countries. This could help the company appeal to more budget-conscious customers.