When Deeper Dives Reveal Hidden Truths: Peloton

December 13, 2025

In value investing you get pummeled. Often the positions you’ve underwritten have been forsaken by the investment community for one reason or the other. Whether it’s execution issues, strategic blunders, mismanagement, or unpopular sector, the reasons are many and varied.

Once the sector or the company falls out of favor, the media piles on. Negative articles tend to attract twice the eyeballs, so negativism sells, and it sells well. We get it, but holding the positions requires some understanding (or faith/hope?) that things will turn if you’re right.

So a few weeks back we came across this article from Bloomberg.

Now that’s a nasty headline. Peloton, one of the positions we own, recently launched a new collection of cross training bikes and treadmills on October 1, something we covered here.

The introduction of the physical products coincided with the launch of Peloton IQ, an AI powered “personalized coach” that would recommend specific workouts across the different modalities (e.g., cardio, strength, yoga, pilates, etc.) to achieve your fitness goals. So the success of Peloton’s refreshed product line is critical to its long-term success, and if it completely shanked it in a “K” shaped economy (i.e., the rich getting richer and spending, while the poor getting poorer because of inflation), then we’re looking at a slow melting ice cube.

So how’re we doing?

We think you’ll be surprised. Let’s deep dive this like a hedge fund would . . . oh wait that’s us . . . here goes: