Peloton Aims to Sell $1B in Stock

Peloton (NASDAQ:PTON) said Tuesday it plans to sell an additional $1 billion of its Class A common shares, as the connected fitness equipment maker looks for ways to come up with cash amid slowing momentum for its products.

The company expects to grant the offering’s underwriters a 30-day option to purchase up to another $150 million of shares at the public offering price, less discounts and commissions.

Peloton didn’t detail how it would use the extra funds.

BMO Capital Markets analyst Simeon Siegel told clients that Peloton’s management team earlier this month said it didn’t see a need for an additional capital raise. But there’s no end in sight for Peloton’s cash burn, Siegel said.

Stock offerings are often pursued by public companies to take advantage of a growing share price, but Peloton’s market value has plunged this year. Its shares were up less than 1% ahead of the market’s open on Tuesday, having fallen nearly 70% year to date. Shares had closed Monday down 3.5%, after touching a fresh 52-week low of $46.70 earlier in the day.

When the company reported a wider-than-expected loss in its fiscal first quarter earlier this month, it also slashed its outlook for revenue for the year by as much as $1 billion.

PTON shares prospered $2.22, or 4.7%, to open Tuesday at $49.70.

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