Peloton; Work From Home (AKA Remote Work); More SPACs; Long-Term Stock Exchange
Buy the rumor, sell the news
Peloton has ridden the covid wave well. Will it crash and burn once there’s a vaccine?
Peloton’s stock has enjoyed the pandemic:
But therein lies Peloton’s main problem: its stock is a proxy for pandemic-induced business conditions. Stated more simply: gyms have closed, and the exercise-obsessed have turned to Peloton, in droves, to get their dopamine hit. What happens when gyms reopen? How will Peloton keep its customers (and their recurring revenue) from bolting once gyms reopen? What is its moat?
Buying Peloton stock is essentially hedging your bet on time-to-vaccine. Given that we don’t yet know when a vaccine will be widely available, Peloton looks like a good way to play that uncertainty. But once the vaccine becomes available (if it becomes available?), will Peloton cease being a story? It’s hard to tell right now, but were I a betting man I’d be hedging my Peloton position with some puts. (I don’t actually own Peloton stock.)
Joseph Pompliano has a great break-down of Peloton’s financial performance. In his post, he notes some of the steps that Peloton has taken to address my concerns about its moat:
On a per subscriber basis, the average Peloton user is working out almost 25x per month. That is a mind-blowing statistic, and on a year over year basis, it means users are doing 2x as many workouts per month on their Peloton device as they were last year.
What led such drastic growth?
The pandemic obviously assisted, but Peloton has also spent the last year adding additional features like strength workouts, boot camp, yoga, and more. Ultimately, these numbers show that Peloton has made the transition from a “2-3x a week” workout novelty item, to full-on cult status.
I remain agnostic on the question of whether that is sufficient.
Work From Home, AKA Remote Work: What are the Trends? What are the Implications?
The notion of remote working, also called work from home (WFH), fascinates me. I’m rather biased against offices: I’ve never enjoyed working in them, hate commuting, and generally find that I am happier and more productive when I am in full control of my working environment. So, for me, working from home, or remote work, or whatever you want to call it, is a boon.
That having been said, I also try to remain aware of my biases and how they may skew my perceptions of the world and how it works. So, I’ve been meaning to write about remote working, and figure out where it stands today, where it is headed, and whether it is a mere trend or a radical restructuring of work.
It seems to me that companies which presently have work from home (or remote—I’m using the terms interchangeably here) arrangements break down along the following lines:
Fully remote companies. GitLab is a great example of this kind of company.
Temporarily remote companies. These companies have indicates that their employees can work from home at least until a vaccine is made widely available, but the expectation appears to be that once that vaccine is widely available, all or most employees will be expected to go back to the office.
Hybrid companies. These are companies have recognized that some employees prefer to work remotely, but intend to reopen their offices once vaccines become widely available. They have therefore announced that employees who want to work remotely full time may do so.
More SPACs
Keith Rabois’ company OpenDoor is planning to merge with a SPAC.
Long-Term Stock Exchange
The Long-Term Stock Exchange (LTSE) is interesting, in that it claims to preferentially treat long-term investors. Conventional stock exchanges, such as NYSE or NASDAQ don’t contemplate investor tenure: your rights when you hold Microsoft common stock for a month are the same as those of an investor who holds Microsoft common stock for a year, five years, or a decade. (Of course, if someone holds millions of shares of Microsoft common stock, they may have more access to Microsoft corporate than you do with your few hundred shares, but that access is not inherent in the rights conferred to stockholders.)
LTSE’s thesis is that the financial markets reward short-term thinking over longer term planning. Their thesis is that inculcating a preference for longer-term shareholders redounds to companies’, and, ultimately, shareholders’ benefits. It’s an interesting theory.
Something that I do not understand, though, is how institutional investors will react to this kind of exchange structure. For example, will institutional investors argue that treating shareholders of the same class of stock differently, based on tenure of holding, is discriminatory? Will their compliance departments allow them to buy LTSE-traded stock? I haven’t seen any good discussions about these questions.