Peloton, New York, confidentially submitted a draft registration statement for a proposed initial public offering relating to the proposed initial public offering (IPO) of its common stock, the company announced. The filing occurred as the company faces a lawsuit over its use of certain music in its classes and a review of some of its patents.
The draft registration statement for the IPO was sent to the Securities and Exchange Commission (SEC) on June 5. Now, the company will go through a review by the SEC, which will include a question and answer period.
Filing confidentially allows Peloton’s prospectus to remain private for longer, possibly up until the share sale, according to Forbes.com.
Peloton’s private valuation is $4.15 billion, according to Forbes.com.
The number of shares to be offered and the price range for the proposed offering have not yet been determined. The IPO is expected to begin after the SEC completes its review process, subject to market and other conditions.
As the company goes through this process, it also is fighting a $150 million lawsuit filed in March by 10 music publishers alleging copyright infringement on more than 1,000 songs the company uses in its streaming and on-demand classes. The company said it would remove any classes using the songs in question, but in April, Peloton filed a countersuit, saying the lawsuit exhibited antitrust behavior.
In addition, the U.S. Patent and Trademark Office plans to review three Peloton patents. Peloton had filed a suit in September 2018 against Flywheel Sports alleging that Flywheel had infringed upon Peloton’s patents. Flywheel asked a review board within the Patent and Trademark Office to review the patents, contending the patents covered old ideas.
Peloton launched in 2012, selling its first bike in 2014. Since then, it has sold more than 400,000 bikes and lured 500,000 subscribers who not only pay around $2,000 for a bike or $3,995 for a treadmill but also pay $39 per month to stream the company’s classes. Recently, the company also began offering a $19.95 per month digital membership that allows people to stream classes on devices without buying one of its bikes or treadmills. All of this purportedly would garner Peloton $700 million in sales for the fiscal year that ended in February, according to a February 2019 CNBC story.
The announcement of Peloton's IPO pursuit came a year after SoulCycle announced that it had withdrawn its IPO plans due to "market conditions." SoulCycle initially announced it planned to do an IPO in 2015.