Why Peloton Bikes Won’t Become $ 2,000 Hangers

This is the question on every Platoon (NASDAQ: PTON) the mind of the investor. Is cycling just a fad? Will it become an expensive piece of furniture that no one uses after a few months? Motley Fool analyst Tim Beyers and Fool collaborator Brian Withers address this question in an episode of Fool live registered on February 8. You might be surprised at why they think this home exercise equipment specialist has the ability to stay.

Tim Beyers: [Reading a viewer’s question] “I just can’t understand. It’s Lee Adams. [I can’t] get it out of my head that six to eight months, the bike treadmill is a $ 2000 hanger. “Here’s the thing I want you to think about Lee, if it was true you wouldn’t see the backlog you see, so I think it does. I don’t think you’re wrong, but instead for it to become a hanger, what happens is it goes on craigslist and then it goes to someone like the fool i know who picked up a used peloton and started buying that Connected Fitness subscription.

It’s not the same as the spinning bike you bought that has nothing connected. It’s just not the same. It becomes a hanger because it is not connected to anything else. In the case of Peloton, it is resalable because it is connected to Peloton and someone may want a Peloton subscription.

This is where Marie comes in here, your comment is you own the bike, but some people who can’t afford the buyers bought a cheaper bike and paid the app for the experience. Right. What this tells me is that it is an ambitious brand. As Apple, it’s an ambitious brand. I want to own it. I can’t afford it. I’ll get a cheap bike and pay $ 12 a month and get the content because I want to be part of the community and my friends are on bikes and I want to take classes with them.

Brian Withers: So maybe in a few years I’ll be able to afford the bike.

Tim Beyers: Maybe in a few years I will be able to afford it.

Brian Withers: I want to upgrade.

Tim Beyers: Or I’ll buy one from craigslist or something. These tailwinds, I don’t see them as headwinds. I see them as tailwinds. Go ahead Brian.

Brian Withers: The other thing, and I did a little research before the Friday show, I went on Craigslist and couldn’t find any. I live in Raleigh, Durham, Chapel Hill. There are over a million people living in our area and I couldn’t find one on Craigslist.

This should tell you something. The other thing I’m going to say is that I have owned a lot of exercise equipment over the years and bought a spin bike, this may have been ten years ago, and this is the only thing that still exists. You can see it right here, there is my spin bike.

Tim Beyers: Pleasant.

Brian Withers: It’s not connected to anything, but I can put my laptop on it and I can watch Fool Live or I can pay the $ 13 if I wanted the subscription, but that’s the only thing for me that gets stuck, and there is something about a spin bike that gives you a great workout in a short time and that is easy and accessible.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

About Dianne Stinson

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