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Guru: Exercise Titan Is So Done

Andrew Left at Citron Research sees dark days ahead for Peloton
By Neal Colgrass,  Newser Staff
Posted Dec 11, 2019 4:48 PM CST
This Sept. 26, 2019, file photo shows the Peloton logo on the company's stationary bicycle in New York.   (AP Photo/Mark Lennihan, File)
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(Newser) – Peloton's month could get worse—we're just not sure how. First, a company commercial was widely panned and inspired a tongue-in-cheek response. Then stock fell, and kept falling this week. Now an esteemed short seller predicts that Peloton shares will plunge to just $5 in 2020, CNN Business reports. In short, Andrew Left at Citron Research says Peloton's rivals make "virtually identical exercise bikes ... that are both more affordable and functional." He credits Peloton with hitting the market early and spending nearly $600 million in marketing to capture "the high-income low hanging fruit while competition was low," but says Peloton's "glory days of hardware sales are in the rear-view mirror."

Left likens the company to GoPro and Fitbit, two former market leaders that were damaged by competition. He and other Citron analysts are no slouches, either: They've been able to move stock with just one report and famously exposed fraud at Valeant Pharmaceuticals in 2015. But Luck is "also wrong from time to time—aren't we all?" writes Rick Manirriz at the Motley Fool, where you can read about Peloton's strengths, like doubling its connected subscribers over the past year. And Bloomberg notes that 19 firms still advise buying Peloton. Despite falling another 2% Wednesday, Peloton shares closed at $32.03—a 30% increase since the company's September IPO, per CNBC. (Peloton was sued for $150 million in March.)

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