Motley Fool
Why Peloton Stock Just Turned South
Shares of Peloton Interactive (NASDAQ: PTON) went on a run yesterday, rising 15.5% after the exercise bike and treadmill maker announced it would sell $1 billion worth of stock to raise cash to help offset the mammoth $1.4 billion in cash it has burnt over the past year. Yesterday’s run-up was a curious reaction from investors — both to the reminder that Peloton remains a deeply and increasingly unprofitable company and to the prospect of seeing their ownership stakes in the stock diluted by the share issuance. After all, as The Wall Street Journal pointed out in an article this morning, it was just earlier this month that Peloton CFO Jill Woodworth assured investors that the company had no need to raise more cash to fund its operations.
