Investors Hope the Fed Won’t Dampen 2023’s Big Rally

A London-based banker dies by suicide during an insider-trading inquiry. The employee of Perella Weinberg Partners was a suspect in a German investigation into accusations that someone at the bank given others tips about planned takeovers. British authorities had searched Perella Weinberg’s London offices on Jan. 25.

Peloton’s self-help plan shows progress

When Barry McCarthy became Peloton’s C.E.O. almost one year ago, his mandate was clear: fix the home-fitness company, whose fortunes rocketed during the workout-at-home pandemic boom before falling after it overextended itself and lost hundreds of millions.

On Wednesday, as Peloton announced its latest financials, McCarthy is feeling optimistic about the company’s prospects. “It’s nice to be on the backside of a near-death experience,” he told DealBook in an interview. The question now is whether he can get the company growing again.

Peloton has achieved the first goal McCarthy set: cash-flow positivity. The company said it had about $8 million in positive cash flow for its second fiscal quarter. (That strips out costs to pay suppliers to settle obligations, however; it had negative cash flow of $94 million otherwise.) Contrast that with Peloton’s situation nine months ago, when the company reported $747 million in negative cash flow.

Peloton reported a roughly 30 percent rise in quarterly revenue from last quarter, to $790 million, helped by promotions like a $300 discount on its bikes and treadmills. Using generally accepted accounting principles, the company lost $335 million in the quarter, down from $439 million a year ago but more than analysts had expected.

The next goal is restoring growth. Part of that plan includes expanding use of Peloton’s app beyond owners of its equipment. “We’ve always been afraid to market to that use case” because it might encourage people to use someone else’s hardware, McCarthy said. (Aiding in that effort will be Leslie Berland, the former Twitter chief marketing officer whom Peloton recently hired as its C.M.O.)

Article source: https://www.nytimes.com/2023/02/01/business/dealbook/markets-fed-rates-stocks-bonds.html