Peloton Slips as It Taps Market for $1 Billion Share Sale

Peloton stock (NASDAQ:PTON) traded 3.3% lower in Tuesday’s premarket as the gym equipment maker hit the market with an offer to sell stocks worth $1 billion.

The offering comes with a greenshoe option of up to another $150 millionn in Class A shares.

The stock closed 3.5% lower at $47.49 Monday. If the sale were to happen at this price, the offering would roughly come to 7% of the company’s stock, or 8% if the greenshoe is exercised.

Peloton indicated three likely destinations for the stock: entities affiliated with Durable Capital Partners, accounts advised by broker T. Rowe Price, and TCV, one of whose co-founders is also a director of Peloton.

The stock has fallen around 44% since the November 4 earnings report that saw the company lower its annual revenue guidance by as much as $1 billion. The company overestimated demand for its home exercise equipment at a time when gyms were reopening and the initial pandemic-driven boom in fitness equipment was fading. Revenue rose a mere 6% to $805.2 million in the first quarter.

Peloton now expects annual sales of no more than $4.8 billion and as little as $4.4 billion in the current year.