I remember people loudly exclaiming that people wouldn’t be buying Peletons once people started going back to gyms but the “who could have known?” sentiment appeared anyway after the stock had crashed.
Some people simply don't care if there is a value proposition because they are investing in market sentiment, not fundamentals.
Other people simply don't bother scrutinizing the value proposition because they dont care about their investment and are comfortable gambling.
I read their Series F pitch deck and the projections were clearly detached from reality. Targets were to basically capture more revenue than the entire gym sector and home equipment sector.
Folks who went for the series F pump and dump lucked out bigtime with the pandemic
There is no need for a toaster to be connected to WiFi, yet somehow, it's fast becoming the only option available.
What do people say they don’t have enough time to do? Work out
So people worked out. Exercise equipment became out of stock, but Pelotons I don’t think did. Hiking trails and campsites got packed too. People were doing all these activities that they never did before the pandemic. The market for exercise — and Pelotons — ballooned.
But obviously once the pandemic ended, people would get jobs back and it was likely that a lot of jobs would go back to the office. People will easily go back to prefer going out instead of working out (not making a value judgement here - you do you). Now no one has time to exercise anymore and the exercise market has shrunk back to “people who make time to workout and want to invest in doing it at home,” which is tiny. The subset of that market that is willing to “drop a few Gs on an exercise bike” is a sliver