Business

David Einhorn Boosts Peloton Stock with Positive Assessment

Thanks to impressive quarterly figures and the support of David Einhorn, Peloton is experiencing a significant rise in its stock price.

Eulerpool News Oct 25, 2024, 2:23 PM

The renowned Wall Street investor David Einhorn has boosted the stock of the heavily troubled sports equipment company Peloton Interactive with positive remarks. In the last three months, the Peloton stock price has risen by an impressive 82.80 percent after the hedge fund guru Greenlight Capital acquired a $6.8 million stake in Peloton.

In the third quarter of 2024, Peloton was able to report unexpectedly strong results. The company reduced its loss from -0.68 USD per share in the same quarter of the previous year to just -0.08 USD, significantly better than the expected -0.172 USD per share. Additionally, Peloton recorded a 5.6 percent increase in revenue to 22.2 billion USD. These improvements are mainly attributed to a stronger focus on profitability rather than growth.

Another positive impetus came from the partnership with Costco, which enabled the sale of the Bike+ both in the retailer's stores and online. Additionally, Peloton was able to postpone the maturity of its debt through refinancing, providing the company with more flexibility for a sustainable turnaround.

Historically, Peloton benefited from gym closures and the increasing demand for home fitness equipment during the COVID-19 pandemic. However, excessive investment in capacities led to high inventories when demand decreased after the lifting of COVID restrictions. This put the company in a difficult financial position, leading to the consideration of a withdrawal from the stock market.

The positive response from investors is reflected in the current price trend. After a rapid increase to $6.27, the stock closed with a strong gain of 10.97% on Wednesday but temporarily fell by 2.15% to $6.14 on Thursday. This volatility indicates investors' uncertainty as Peloton attempts to implement its strategic measures and focus on a profitable future.

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