No pun intended, but what an odd ride it's been!
Peloton- the Exercise Bike for the 1 percent- seemed to come along at the absolute perfect time (seriously, we ought to investigate this company to see if it had anything to do with the actual development of COVID-19.) A pandemic sweeps the planet. Millions of people are forced into lockdowns or at least voluntarily shift to Virtual Attendance at work- and most of those people now working from home are at least Upper Middle Class. Millions see their gyms shuttered and locked and become concerned that hours in front of their computers will lead to sagging stomachs and expanding waistlines.
Suddenly, here's a very pricey exercise bike which streams live spinning classes to simulate the experience of being on the floor of the basketball court where your fairly wealthy friends used to gather to sweat a few times a week. It's easy to order, easy to set up in your huge living room, and fun to use- and the $2000 price tag and monthly fee for the "classes" is of no concern to you because you haven't missed a single day of work- in fact, other than being able to sleep a little later and keeping the Audi in the garage, you really haven't experienced any effects from the pandemic at all (no negative ones, anyway.)
As if things weren't going well enough for Peloton, they even managed to create an "accidentally" (?) controversial ad featuring a terrified-looking, rail-thin trophy wife desperately taking advantage of her husband's "thoughtful gift" of a Peloton bike to get up at 4 AM and sweat off half a pound or so before tending to the kids and hubby (who presumably aren't going anywhere anyway, seriously WTF?) which went viral, creating a wave of free advertising for a company that was already doing extremely well. Hell, that ad even got parodied on SNL, which is the absolute Gold Standard for commercials.
In our winter of despair, there seemed to be no limit as to how big Peloton could get. On December 21, 2020 stock in the company hit $162 per share, up from $25 at the time of it's initial public offering.
And then...the day came that the board of directors over at Peloton, INC must have dreaded: The vaccines began to hit the pharmacies. Delta subsided. Gyms began to reopen. A momentary surge of optimism in the board room when Omicron was detected, but within weeks after that it was clear that the party was over. "Back to Normal" was nothing but bad news for the Exercise from Home market and for Exercise from Home using this Ridiculously Overpriced Toy market. Like the tulips and the .com businesses and the real estate that came before, the Peloton bubble was bursting.
Yesterday, Peloton stock closed at $24.60 a share. There are stories this morning that the company may be on the verge of bankruptcy. I still see plenty of commercials for the bike on my television during football games and (especially) while watching CNBC, a channel geared toward that golden Upper Middle Class with disposable income I'd like to join someday before I die. But the bloom is most definitely off the rose. It's been a wild ride, Peloton. Hope your CEOs invested their money into something more solid and less susceptible to sudden changes in the economic environment. You know, like crypto currency- that's a bubble that will NEVER burst. And I especially hope that the Terrified Trophy Wife Actress can still find gigs. She's really cute.
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