The fitness start-up Peloton saw its share price fall more than 14% on its stock market debut, becoming the latest in a line of newly traded companies to receive a frosty reception from investors this year.
Initially priced at $ 29 (£23.50), the company’s shares were down nearly 13% to $ 25.12 (£20.37) on Thursday afternoon in New York.
The muted opening marked the third-worst trading debut in a decade for companies that have raised at least $ 1bn (£810.4m) in investment, according to Bloomberg data.
It has been a rocky year for unprofitable start-ups going public: Uber’s shares have fallen 30% since May following its $ 8.1bn (£6.6bn) initial public offering (IPO) – the year’s largest.
WeWork, the controversial co-working space start-up, saw its plans for an IPO collapse last week after the company failed to drum up investor interest in its £16bn listing – a £22bn discount on its valuation just months earlier.
The New York-headquartered Peloton, which sells technology-enabled exercise bikes, has seen its popularity soar over the past two years.
Dubbed the “Apple of fitness” by its supporters, Peloton had sold 400,000 bikes as of February 2019. Subscribers then pay a monthly fee of $ 39 to access virtual classes they can watch through a screen in the bike.
While the company’s revenues have consistently increased in recent years, reaching £742m in the 12 months to June 2019, it lost £159m in that same period.
The company’s chief executive John Foley said he expects the company to be profitable by 2023.
He added that he wasn’t taking the poor share price performance too personally.
“I’m following it like everyone else,” Mr Foley told Axios, “but trying not to take it too personally or getting too discouraged after a couple hours of sideways trading.”
He added that it would be “a long journey”, and while he would rather have the share price increase, he said it was not a “reflection on our fundamentals or the excitement of investors who came in.”
In the company’s last funding round in 2018, it raised $ 445m from Silicon Valley’s TCV at a valuation of just over £3.25bn. Less than 18 months later, that valuation had doubled to £6.49bn.