Peloton Could Sell Substantial Minority Stake as Business Struggles

PTON has lost over 52% this year

Deputy Editor
May 6, 2022 at 9:49 AM
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A report from the Wall Street Journal came out last night saying that Peloton Interactive Inc (NASDAQ:PTON) may be looking to sell 15% to 20% of its minority stake in an effort to shore up some of its business, as the company continues to struggle. Peloton has yet to find any potential investors, but is targeting industry players and private-equity firms. The stock was last seen down 3.8% at $16.37, as it's set to open at its lowest level on record. 

PTON has already lost over 52% in 2022, and is looking to add to yesterday's 9.1% drop as the market suffered a major selloff. The 10-day moving average has put direct pressure on PTON since the start of April, while a late-March breakout was rejected by the 80-day trendline. 

Should this downward price action continue, it could attract bear notes from the brokerage bunch. Of the 19 analysts in coverage, 11 say "buy" or better, while eight consider the stock a "hold" or worse. What's more, the 12-month consensus price target of $43.43 is a whopping 164.8% premium to current levels. 

An unwinding of optimism among short-term options traders could also pressure PTON lower. The security sports a Schaeffer's put/call open interest ratio (SOIR) of 0.81, which sits higher than just 18% of readings from the past year. In other words, short term traders are much more call-biased than usual. 


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