Hello and happy Labor Day weekend!
First it was WeWork. Now it’s Peloton that’s aiming to go public. As my colleague Alexei Oreskovic wrote this week in his weekly Trending email (sign up here if you don’t already receive it), there’s more than just the red ink on their income statements that ties the two companies together.
Both of these New York companies have garnered rich valuations in the private markets despite spiraling losses, they both have dual stock structures giving insiders 20 votes per share (one-upping the already controversial 10-votes-per-share norm of their Silicon Valley counterparts) and both stretch the definition of what it means to be a “tech” company.
Troy Wolverton previously spoke to Peloton investors to find out why they think the business is set to explode. And as Shona Ghosh reported, while Peloton played up its subscription business in its IPO filing, its hardware margins are actually more impressive than Apple’s. Peloton’s hardware margins were 44% in 2018, while Apple’s were about 30%.
Troy had some analysis on Peloton’s ultra-low churn rate. Peloton says only 0.65% of its subscribers cancel each month. Customer retention experts told Troy that number “doesn’t pass the smell test.” He also noticed that the company disclosed in its IPO paperwork that it had discovered problems with its internal controls.
The S-1 also lifted the lid on the extent of Peloton’s marketing spend, which increased by 114% ahead of its IPO in its quest to win over a young, affluent audience. Tanya Dua has the details there.
Julie Bort meanwhile had a breakdown on the compensation packages of the top two execs, including CEO John Foley, with each getting $21.4 million.
One thing I found interesting in the IPO filing: There wasn’t a lot of information on the performance of Tread, the company’s $4,000-a-pop treadmill. I’ll admit to being a regular Peloton user and spin bike owner. New York’s a tough place to cycle around and the winters can be rough. I’m less clear though on the growth prospects for Tread.
What am I missing? What do you think to Peloton’s prospects? Let me know.
We’ll be hosting a webinar talking to Cy Scott, CEO of the buzzy cannabis tech company Headset, about his VC fundraising tips. Poseidon partner Emily Paxhia will also weigh in about the unique challenges of investing in cannabis and how she picks winners in a crowded market. You can sign up here.
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Patty McCord was the original chief talent officer at Netflix. Now she’s an HR consultant and the author of the book “Powerful.” During a Business Insider Prime webinar, she shared some of the most common people-management mistakes she sees — and how to avoid them. You can get the key takeaways from her presentation and access to a recording of it right here.
Finance and Investing
D.E. Shaw asked staff to sign a take-it-or-leave noncompete, and the deadline is weeks away. Insiders say some people could walk even after management improved the payout.
D.E. Shaw has relaxed terms of its deferred-compensation structure ahead of a mid-September deadline on the firm’s new noncompete contract for all investment staff to either sign the agreement or get fired, insiders said.
UBS’s Americas private-wealth head says he thinks losing a ‘few hundred’ advisers would not be a bad thing, and is looking at how robos can help keep the bank’s richest clients
UBS rolled out a digital-wealth platform in April 2018 by teaming up with the fintech startup SigFig and, at the time, promoted it largely as a nice-to-have enhancement for smaller US clients.
Ray Dalio sees ‘serious problems’ stemming from the next recession. Here’s why he warns even the Fed might be powerless to save the economy.
Few things can conjure up a panic among investors quite like a recession.
Tech, Media, Telecoms
$100 billion SoftBank Vision Fund has shaken up Silicon Valley with mega fundings. A cadre of Deutsche Bank alums are behind many of the deals.
The SoftBank Vision Fund is most closely associated with SoftBank Group’s CEO, Masayoshi Son.
‘It gives a sense of elitism’: Netflix is pioneering brand deals for streaming TV, but some partners bemoan its approach
If you’re a brand looking to land a high-profile tie-in to a Netflix original like “Stranger Things,” Netflix will call you — you won’t call them.
Beleaguered media measurement giant Comscore is turning over a new leaf, again — and says it will be cashflow positive by the end of the year
Beleaguered media measurement and and analytics giant Comscore is recalibrating itself again.
Healthcare, Retail, Transportation
A startup working with 200 pharmacies is trying to break into the hypercompetitive drug-delivery business and give elderly Americans cheaper medications
In 2014, Stu Libby wanted to do something about the long wait times at pharmacies. He thought there must be an easier way to pick up prescription drugs.
Beauty mogul Huda Kattan, who built a $610 million fortune from online fame, shares 3 business tips for influencers starting their careers
Huda Kattan, the 35-year-old self-made beauty mogul worth over $600 million, is one of the most successful influencers of all time and has a whopping 38 million Instagram followers.
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NOW WATCH: Nxivm leader Keith Raniere has been convicted. Here’s what happened inside his sex-slave ring that recruited actresses and two billionaire heiresses.