PTON TL 1L USD Corp

Peloton Interactive Inc

Credit, Consumer


Publicly traded companies mentioned herein: Peloton Interactive Inc (PTON)

Highlights

The presenter is long Peloton Interactive Inc (PTON)’s first lien term loan due May 2027. PTON’s capital structure consists of this $750MM high coupon* issuance trading at 98 (10% YTM), $1.4B of busted zero-coupon convertible bonds ($239.23 conversion price vs. $7.50 stock price) trading at 71(doesn’t own), and a $2.6B market cap to go along with $1.3B of cash. He thinks investors can create the business for -$500MM with the term loan due to PTON’s major cash burn (-$2.4B FCF in fiscal year ended June 2022), and that the loan is covered multiple times on traditional credit metrics even using aggressive churn assumptions. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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