Adding Peloton To My ‘Fashology’ Index

I’m home in Phoenix picking up Rachel to come to Coronado for a bit.

It’s HOT. But that did not stop the porch cigar…I did have to move to the patio…

You might be asking yourself…’how does Howard look so good?’

I would definitely say I owe it to Manscaped which also just launched the ‘weed whacker’ (nose hair trimmer):

You can order the whole package here and if you use ‘social leverage’ get 20 percent off and free shipping.

Onwards…

I have added Peloton to my ‘Fashology Index‘. The list/index now includes $LULU, $NKE, $AAPL, $RH (Restoration Hardware) and $PTON.

Peloton is a stock that I have gone from bearish to bullish the last few months.

As an IPO I thought it would struggle as many hardware IPO’s do, but it did not. I was pissed that they did not do a Direct Listing and chose Goldman to do the IPO.

My friends that used it continued to rave about it, but still, my friends can afford it and I did not think it was a product for everyone.

Professor Galloway wrote about it on March 6th and it all started making sense to me.

Then we went int lockdown and the stock plummeted and I forgot about it for a few weeks while I tended to portfolio companies and the markets and started ‘Panic With Friends’.

At the beginning of May it seemed like everyone was talking about Peloton and was buying one for their homes because of the lockdown. It became a COVID stock.

So I bought the stock at $30 (shared on Stocktwits) and tried to order one for the family. It was a 5 week wait, so I bought some more stock instead and never ordered the Peloton. I still plan on doing that.

Peloton is both a Netflix competitor (attention and content), a social network and potentially competes directly with LULU on clothing. Peloton has your attention to place product on the screen and will eventually do rewards for discounts on their products as you ride. In Scottsdale, the Peloton store is directly across from the $LULU store. It seems to me that Peloton can become $LULU easier than $LULU can become Peloton.

Peloton has been growing faster than $LULU and I think will close the valuation gap on $LULU over the next 5 years. I put this chart together on Koyfin:

On a big market correction or a few weak quarters for Peloton, each of Facebook, Apple, Amazon, Netflix or even Microsoft could be buyers. Most likely would be Apple as they know hardware, have Apple TV and would love a positive social network.

In 2020, being a ‘fashology’ company is good for your valuation and market cap.

Disclosure – Long $AAPL, $NKE, $LULU (a few shares) and $PTON. I screwed up terribly by selling my Restoration Hardware last month.