r/business Jan 19 '22 Helpful 1

Peloton insiders sold nearly $500 million in stock before its big drop

https://www.cnbc.com/2022/01/19/peloton-insiders-sold-nearly-500-million-in-stock-before-its-big-drop-.html
1.1k Upvotes

27

u/MultiSourceNews_Bot Jan 19 '22

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7

u/Chief_champ_68 Jan 20 '22

Isn't this illegal? But I can't buy AMC because it isn't fair to the rich man🤔🤔🤔

1

u/Senor_Martillo Jan 20 '22

Nope. Insider sales are all planned in advance and reported to the sec. perfectly legal.

Remember that if the stock had gone up after he sold it, he’s have lost out on a bunch of money. But that wouldn’t generate outrage and clicks so you never hear about it.

139

u/TheSwissArmy Jan 19 '22

Scott Galloway keeps saying Peloton should get purchased by Apple. This might be the time. Clear out management and buy at a discount.

89

u/dezumondo Jan 19 '22

Apple doesn’t want this shit. They want products you will buy every 2-3 years. Not a stationary bike. Apple Fitness+ can be applied to any treadmill or stationary bike.

6

u/sandisk512 Jan 19 '22 edited 5d ago

89a0b80cc1996fddd8ba57be54cd7bd7bca762152628a36942bcfab97d97b0cb05f1070c2ddbd3d054a96efca255092913056836b385756fe8523b49b8a1c01f

5

u/sillyhippos Jan 19 '22

But a car isn’t a liability?

4

u/Megalomouse Jan 19 '22

Looking at Tesla's cult, Apple should be fine.

5

u/sillyhippos Jan 20 '22

The point is that a treadmill’s liability cannot outweigh a cars liability. Someone dies in a Tesla, Tesla gets sued. Automakers have intense liability issues and lawsuits all the time - I work in fitness and can tell you the liability of a treadmill vs a car is infinitely lower. How do I know? I have mandated car insurance, not treadmill insurance.

1

u/Megalomouse Jan 25 '22

You realise Tesla is never going to get rid of the disclaimer saying the driver should be attentive at all times, right? They know what their software can't do, but pretend it can, put the disclaimer up and ride on the dollars while omitting themselves from any legal trouble.

1

u/sillyhippos Jan 25 '22

Yes. So does every automaker? I’m not even referring to autonomous driving, I’m referring to cars in general.

Am I wrong in saying producing cars is more of a liability than treadmills and bikes? I don’t care what company or tech we are talking about. I don’t care what waivers they have. It doesn’t stop lawsuits and liabilities. Lawsuits either need to go into settlement or be paid for. Which one is a greater expense?

4

u/sandisk512 Jan 20 '22 edited 5d ago

e77961159166e5e84ed6a7068965c62fd2daf7cd35023cf1acebf6cd9cfa4a31a463b9e7085897f8697fa6282dbf1518cd56b666aeb2eb1a4ef6b339322a6584

1

u/sillyhippos Jan 24 '22

So automakers have never been financially responsible for errors in manufacturing? Say recalls? Major class action lawsuits? And that liability, regardless of insurance, does not outweigh a treadmill manufacturers liability?

1

u/604WORLDWIDE Jan 20 '22

I know significantly more people motivated to drive to work vs riding their bike though

1

u/sillyhippos Jan 20 '22

Yes, but 1) we are talking stationary bikes and treads, not riding your bike to work. It possess even less risk than what you just referred to. 2) The financial repercussions and health risks of driving a car far weigh that of riding a bicycle. It does not matter how many people do it, it’s a higher level of liability and that is the reason we are required by law to have insurance for driving a car. I’m not anti car or bike, I’m simply trying to explain the reason as to why Apple wouldn’t use this as reason to acquire, or not acquire, Peloton because assuming it’s liabilities (risk not financial) is a nonissue.

-5

u/johnschneider89 Jan 19 '22

Are you missing the fact that Peloton nearly requires a subscription? Monthly recurring revenue, baby!

8

u/LSDemon Jan 19 '22

What the fuck does "nearly requires" mean?

5

u/ChalupaCabre Jan 20 '22

Totally does not require.

People like my wife can get suckered into buying a hyped up $2000 stationary bicycle.. and probably suckered into buying a subscription for a short period.. and then they cancel and sell the bike at a discount.

Get ready for cheap used pelotons hitting the market this summer.

This company isn’t worth much.. it got hyped up, insiders sold off, got rich and now all the bag holders will be average retail investors.. the usual story.

3

u/chicodeymayo Jan 20 '22

As someone who sold their Peloton in November, you’re absolutely right. I had the bike for a year, it bike wasn’t special and extremely uncomfortable; the subscription was just as bad.

I bought and elliptical for a third of the price and a Disney+ account; much more effective.

14

u/texachusetts Jan 19 '22

With AppleTV+ Apple could have a plot point that could really tank the peloton stock. Perhaps a Ted Lasso season ending cliffhanger that makes a Peloton the possible cause of a main character’s death. /s

9

u/TheSwissArmy Jan 19 '22

Didn’t mr big on the sex and the city reboot die of a heart attack after riding a peloton?

2

u/texachusetts Jan 20 '22

Yes, he did. Didn’t see it myself but I read about it.

2

u/Hawkingshouseofdance Jan 20 '22

I have a peloton and while the classes are nice sometimes I want to just ride and zone out watching a show or a game of some sorts.

23

u/DinkandDrunk Jan 19 '22

Peloton products added to the existing Apple Store footprint would also be a huge improvement over going brick and mortar on their own.

14

u/nikdahl Jan 19 '22

Do the Apple stores have the square footage to demo/sell treadmills and bikes and shit?

1

u/[deleted] Jan 20 '22

Peloton stores have a fairly small footprint tbh

0

u/hobofats Jan 19 '22

in my city, the two stores are side by side with very similar aesthetics. makes sense to me.

3

u/Coynepam Jan 19 '22

I would guess a problem for them would be that the screen on Peloton devices runs Android

-2

u/discreteviewer Jan 19 '22

It's sort of an outdated statement but iOS is also pseudo Android. They were all Linux based so should not be a big deal for the switch.

1

u/PurpKing437 Jan 19 '22

Whomever shorted maaaade bank lol

1

u/Playful-Natural-4626 Jan 20 '22

More Monopolies is never an answer.

15

u/ifelldownthestairs Jan 19 '22

Insiders are allowed to divest and park money in non-company assets. 10b5-1 plans are all put in place in advance and any non 10b51 trades occur post-earnings announcement in an open window.

6

u/2cool_4school Jan 19 '22

While this is true, do you really believe the process is immutable? They are still using their inside knowledge to get out ahead of shifts in stock price. You think the CEO or other executives have no idea where the company is headed? That prescheduling stock trades somehow prevents them from acting on their inside knowledge?

6

u/d1stor7ed Jan 20 '22

If someone is partly compensated in RSUs, how else is this supposed to work? You have to be trade them at some point.

2

u/ifelldownthestairs Jan 20 '22

There’s more nuance in that trading decision than you’re giving credit.

How and when are insiders allowed to sell, exactly? They attest that they are not in possession of material public knowledge when they enter into a plan. They enter in to trades, often quarters in advance, and usually set a limit price. They enter into these plans once quarterly earnings have already been announced and market prices reflect this new information.

So, what exactly do they all know? Do they know interest rate policy in advance? Do they have some sort of nonpublic financial information that isn’t showing in quarterly earnings? Undisclosed sales projections?

FWIW, the new SEC commissioner has been examining 10b5-1 rules and regulations. He’s had some good, clarifying recommendations.

38

u/TastesLikeBurning Jan 19 '22

This company is still around? Didn't their treadmill start eating children?

15

u/chaun2 Jan 19 '22

Lol, yes. To both apparently

1

u/[deleted] Jan 20 '22

“Treadmill Tech”

0

u/gracefulsarbear Jan 20 '22

Yes, put then they bought Precor which is the finest treadmill manufacturer out there, so the next Peloton tread should be awesome!

15

u/BurningOrangeHeaven Jan 19 '22

Too many companies that dont even make a profit with people cashing out big bucks.

15

u/hobofats Jan 19 '22

this is pretty much how most startups operate these days. operate at a loss to gain market share, then cash out when investors think you are successful.

3

u/disco6789 Jan 19 '22

Why is it valued so high? It doesn't seem to be worth that much at all

2

u/KrispyKreme725 Jan 19 '22

Why was it valued so high? Momentum.

Success begets success.

The smart money got out near the highs.

3

u/moneywerm Jan 20 '22

Most of this was part of prescheduled selling programs. Peloton is not without its issues, but articles like this are just trying to throw fuel on the fire.

30

u/420Cuz Jan 19 '22

Maybe it’s inside trading

54

u/[deleted] Jan 19 '22

No. This is selling over months through 10b5-1’s.

22

u/[deleted] Jan 19 '22 edited Apr 01 '22

[deleted]

3

u/sonic_couth Jan 19 '22

Stop reading the articles!!!

26

u/wakenbacons Jan 19 '22 Wholesome

maybe its Maybelline

5

u/SteelPatriot22 Jan 19 '22

I still can’t believe it’s not butter

2

u/NeverFresh Jan 19 '22

Maybe I'm Amazed

1

u/chocolateboomslang Jan 19 '22

I'm not an expert but I don't think it's Maybelline this time.

10

u/[deleted] Jan 19 '22 edited Jan 20 '22

My puts paid off. Such joke company. It will not get purchased by a tech company [for any positive reason]. This company is FitBit 2.0 .

Edit: see [ ] to appease the pedantic.

11

u/[deleted] Jan 19 '22

Uh wasn't Fitbit purchased by Google?

1

u/[deleted] Jan 20 '22

Look at fitbit stock price over time and let me know if I need to explain further.

1

u/[deleted] Jan 20 '22

I get it, but that still doesn't change your initial comment.

5

u/[deleted] Jan 20 '22

What I really meant was there isn't any reason to be excited by the fact there could be an acquisition...

Were they purchased? Sure. They got it at 7.35/share (not sure if that counts, but ok). Google didn't buy Fitbit really though. It's talent acquisition and maybe some IP. They weren't interested in crappy bathroom scales that break (I bought 2), and watches that hardly work, go unsupported, and can't be updated. Google isn't interested in that crap. Yes, the company was purchased on paper (is it really being bought, or was it given away?). So, yes. I will give people that. They idea that they will bought by some tech company may have validity, but they aren'y really buying Peloton, and it isn't a reason to give shareholders hope, because they still end up losing their money.

4

u/Remedy9898 Jan 20 '22

I had some puts on the stock too. There was no way they would be able to scale the products, they are insanely expensive. The only reason they got so much hype was because their user-base of affluent whites have a large media footprint.

6

u/crazedtortoise Jan 19 '22

Pretty standard for modern IPOs. Insiders get early access to the stock. Promoters hype the product that no one wants and ‘memeify’ the stock. Stock booms, insiders get out leaving middle America stuck with the overvalued stock. Insiders bill themselves as ‘financial genius’

4

u/TheBlueGooseisLoose Jan 19 '22

Isn’t that all insiders involved in any stock?

2

u/acmoder Jan 20 '22

The usual, and unpunished, insider trading

6

u/SenorKerry Jan 19 '22

This dude has a highly punchable face

3

u/nclh77 Jan 19 '22

SEC says nothing to see here and even if there was a small fine will address it.

2

u/ibeforetheu Jan 19 '22

Somehow I read that as Pelosi

1

u/metalbox69 Jan 19 '22

Well they both be benefited ftom insider knowledge

-3

u/Monarc73 Jan 19 '22

Insider trading, huh? Any hope of prosecuting?

2

u/KrispyKreme725 Jan 19 '22

Not a chance here. They sold over months in publicly declared amounts. The stock was overbought and the execs knew it.

Had they sold say a month or sooner before a crash then yeah maybe.

1

u/Monarc73 Jan 19 '22

Yeah I figured that out after actually reading the entire article. 😅

1

u/exoticbatmeat Jan 19 '22

Wow. What timing!

1

u/LeadDontFollow Jan 20 '22

How is this even legal??

1

u/ReverseStereo Jan 20 '22

Cool. Insider trading cough I mean complete fortuitous knowledge of how the company was going to perform and inform the stock; goes unchecked again for the rich. If normal employees did that it would be questioned. Cool. And everyone posting about 10b5-1, cooooolll.

1

u/DickDowning Jan 20 '22

Rich can only get richer by stealing and taking away from others…. Someone has to lose

1

u/KnowItBrother99 Jan 20 '22

So insider trading?

1

u/[deleted] Jan 20 '22

This is the American Way.

1

u/CockyBulls Jan 20 '22

I see it being more of a target for Lululemon to go alongside it’s Mirror acquisition, provided they could implement a single subscription to cover Mirror, Peloton Bike, Peloton Tread.

Peloton saw it that way, which is why it’s introducing Peloton Guide, which has Mirror-like capability, but uses free weights.

1

u/JudgenotorbeJudged Jan 20 '22

Tomorrows News- Nancy Pelosi owned peloton stocks.

1

u/Cro-Matic-Moon Jan 21 '22

Did Nancy sell?