Le Peloton

Peloton: Hot Tech Stock or Fitness Spin?

How can it be that fitness is so hot, yet obesity is stubbornly rising? Peloton is a case in point. It’s that uber-cool exercise bike selling for an appropriately cool $2,000 and up. Just in case you’re ready to part with some more cash, the company has a $4,000+ treadmill for you, too. But it doesn’t stop with the hardware. Once you have the stuff, you’ve got to have a subscription to streaming classes from the Peloton Studio.

With such a great scheme for an endless revenue stream, it’s no wonder that Peloton’s IPO was one of the hottest offerings of the year. It raised $1.2 billion.

Cooling Off Just a Bit

However, since the initial offering at $29 per share, the price of this stock has cooled off by 21 percent to $23.01 at closing on Friday. Though the brand is known for a devoted – maybe even fanatical – base of users, the company is caught in a situation of slipping demand for investments in new ventures.

CBS Moneywatch also reports that the company’s fantastic sales growth numbers might have some problems. Some of it comes from financial arrangements that might be a little risky due to zero-interest loans and aggressive assumptions. Put that together with a cooling market and it’s no wonder the stock price faded.

Booming Fitness and Obesity

The booming fitness market is an interesting phenomenon that parallels the growth in obesity prevalence. Since 2000, the number of Americans with fitness memberships has just about doubled – from 33 million to more than 60 million. Obesity prevalence has risen by half – from 30 to 40 percent of adults. At precisely the same time.

How can this be?

Tim Church and Corby Martin do a fine job of explaining this one. All those gym memberships don’t compensate for the fact our daily routines have been reprogrammed – to exclude physical activity. We sit in a car to get to work. Once there, we sit in front of a computer screen. Food more often comes from a drive-through window.

Even that two-thousand dollar Peloton bike doesn’t change the fact of our physical lives preventing a lot of physical activity. We’re so busy that we don’t have time for random motion throughout the day.

So Peloton and other fitness businesses may keep on booming. Physical activity is indeed good for us. But episodic physical activity is unlikely to reverse the obesity epidemic. For that, we need to rethink our physical lives. We need activity throughout our days, not merely sprinkled on top – in brief and trendy episodes.

For more on the Peloton IPO, click here and here. If you want more on the simultaneous growth of the fitness industry and obesity, click here.

Le Peloton, photograph © Antoine Vasse Nicolas/ flickr

Subscribe by email to follow the accumulating evidence and observations that shape our view of health, obesity, and policy.


 

October 7, 2019

One Response to “Peloton: Hot Tech Stock or Fitness Spin?”

  1. October 08, 2019 at 8:06 am, Mary-Jo said:

    What also has been paralleling the obesity epidemic is the glaringly annoying, albeit small group of usually too-thin, too-rich people who are ridiculously muscled and fit because the second they gain a few pounds, they buy every expensive fitness machine, membership, famous fitness trainer, chef guru out there to chisel their bodies to perfection so that they can splash themselves across Instagram and MSM to show us what we could and should be buying and doing to solve obesity!🤬

Leave a Reply