Peloton is in a precarious state. The # of average workouts is down, guidance remains atrocious, and the company slashed bike pricing to generate demand. Nothing seems to be working. Interest in Peloton is declining. https://t.co/JHh7lwUE9y ($) 2/x pic.twitter.com/B9UTfvuHCE

— Neil Cybart (@neilcybart) December 28, 2021

An interesting impact of COVID on tech is that it created two distortions

1. Pulling forward customer acquisition giving a false sense of market size (Disney+)

2. Artificially creating a larger market than existed (Zoom)

For a bunch companies stock price had wrong assumptions.

— Dare Obasanjo (@Carnage4Life) December 29, 2021

Companies like Peloton & Zoom saw massive valuations when everyone was on lockdown but have crashed as we move to hybrid work.

In the short run, the market is a popularity contest but in the long run it’s a money making contest.

Stick with index funds.https://t.co/AkJ9Lmrxki

— Dare Obasanjo (@Carnage4Life) December 29, 2021

This leaves Peloton in a difficult spot. The 2021 holiday season was crucial for the company. Recent Google Trends data doesn't match with a company generating higher buzz to grab additional users. (The spike in search traffic in 2019 was due to a controversial Peloton ad.) 7/x pic.twitter.com/e7htsZ7VYz

— Neil Cybart (@neilcybart) December 28, 2021

One thing I've been outspoken about is Peloton's absurdly high customer acquisition costs. This snippet was from when I analyzed Peloton's S-1. Two years later and Peloton is struggling with that exact scenario: costs & product pricing are too high. https://t.co/mmVb3NGrj7 $ 3/x pic.twitter.com/IRTjGnFTwt

— Neil Cybart (@neilcybart) December 28, 2021

Companies like Peloton & Zoom saw massive valuations when everyone was on lockdown but have crashed as we move to hybrid work.

In the short run, the market is a popularity contest but in the long run it’s a money making contest.

Stick with index funds.https://t.co/AkJ9Lmrxki

— Dare Obasanjo (@Carnage4Life) December 29, 2021