Peloton insiders sold nearly $500M in stock before its big drop | Hacker News Reader

Peloton insiders sold nearly $500M in stock before its big drop

cnbc.com

41 pointsdaveaiello16 comments

> Virtually all of the sales were part of 10b5-1 plans, or prescheduled selling programs.

getting real tired of clickbait, anyone else? can we edit the title?

Even worse because that's buried past the "fold" - below their "key points" (really that isn't a key point?), a big video, and a few paragraphs.

This is no accident. Robert Frank knows what he's doing.

Not disagreeing with you or your criticism of the headline. But it's also worth pointing out that 10b5-1 plans are still rife with abuse. Executives know when they are scheduled to sell their stock, so they have the ability to silently time information to hit after their sales. They also pull shenanigans with multiple, overlapping 10b5-1 plans and constantly starting/stopping individual plans to cancel bad sales, etc.

It's hard to prove abuse and the current rules allow for it anyway. But over time, 10b5-1 plans constantly outperform the market so the assumption is they are frequently abused. It's been an open secret for at least a decade and the SEC is finally attempting to do something about it [1].

[1] https://www.bclplaw.com/en-GB/insights/sec-proposes-big-chan...

I'm not sure why this is newsworthy. Of course they did, they'd be foolish not to. They wanted to lock in some gains, especially since they were aware, just like the rest of the market, that their stock was overinflated because of the pandemic.

As CEO you may want need to become familiar with the rules that govern insider information. Typically if you are a director you cannot trade the stocks you own based on material non-public information.

Also, you may want to read Matt Levine's newsletter. It has plenty of very weird examples that sound just like this.

https://www.sec.gov/reportspubs/investor-publications/invest...

> Virtually all of the sales were part of 10b5-1 plans, or prescheduled selling programs

None of these sales were on inside information, they were all part of a sales plan that was filed when the stock skyrocketed.

Also, thank you for mansplaining insider trading to me as if I didn't know what it was.

As the article itself says, this almost certainly wasn't insider trading

> Virtually all of the sales were part of 10b5-1 plans, or prescheduled selling programs. It’s unclear how many of the sales were also linked to options exercises or options-related tax sales.

So they sold $500M in stock of a company that was worth over $50B at its peak last year... Has the underlying business even changed that much? Isn't it mainly just they were priced at a ridiculous multiple and that has corrected? People love the story of falling from grace though.

I'm not a Peloton insider and I sold a few months ago during their bubble. It was very clear their profit/valuation did not align with their market value. They a very obvious bubble of interest which eventually faltered.

I've never understood how a stationary bike with a screen and some sensors could cost more than or equal to an actual bike. Screens and sensors are cheap and the make of a peloton is also extremely cheap when compared to say a carbon frame bike.

Then I see stuff like this which is something you might expect from a hundred dollar bicycle purchased at WalMart:

https://i.imgur.com/QFSj0fQ.jpg

What am I missing?

They aren't selling a bike. They are selling an exercise lifestyle/club. It has nothing to do with the cost of parts of the bike.

I know that sounds silly, but what you are really paying for are the daily feed of multiple live classes hosted by your choice of personality type. Do you identify with a 25 year old into trendy music and partying? Do you identify with a 35-40 year old who listens to early 90s rock? Do you identify with a mom who is in great shape and loves ABBA? They have all those choices, mixed in with special "events" to get you excited to join the classes regularly. They want you to feel like you are joining a social club and you have found your niche/identity. That's something that another exercise bike vendor can't really compete with. And they've really nailed the whole Apple-like experience where everything just works (assuming your bike isn't defective or whatever).

The bike is just one way to sell that exercise club to people who want to jump into a class with zero setup. They also have a whole platform for normal exercise classes, yoga, etc and lot of people without the bike or treadmill subscribe to that package. My LG TV even has it built-in now where I can turn on any number of live Peloton classes whenever I want.

I'm not suggesting that they aren't massively overvalued or that the equipment doesn't have issues. But the actual quality of the classes is pretty good and is a really impressive product if you are into that. The bike itself isn't the point other than as a vehicle into their platform.

I hear you, personally it just sounds absurd to think I would pay 3k to watch someone else pedaling a stationary bike on what is otherwise kind of cheap equipment, but I'm probably missing something or I'm not the target. Do they have controls over the work out/equipment in real time, take for instance increasing the resistance during the workout? If so that would make a lot more sense.

Exciting to me as petty as it sounds is breathing fresh air and getting out of my house given the circumstances. Thanks for the reply and explanation.

Of course it's absurd but a lot of research has been done into what motivates people to make so-called discretionary purchases (that is, most anything above the level of bare necessities at the lowest feasible price, if you can afford it) and other life decisions which are essentially purchase-like. And not surprisingly, a lot of this motivation has to do with (relative) status and image, and the ability to project it. As applies to everything from what clothes you wear and what car you drive, to where you go to school and what neighborhood you live in, etc.

I won't call the following article "research" but it does seem to capture the spirit of this line of thinking:

https://buffer.com/resources/people-dont-buy-products-they-b...

Modern day ponzi scheme

Could it have been due to anticipated blow back from issues related to the Tread+ (combined with the stock being clearly over-valued)? I can't tell if the timelines line up. It seems news of a child dying due to injuries from their product came many months after the major stock sales made by execs. Is it possible they knew about these issues long before they were publicly addressed?

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