One way that companies seek funding is through offering shares of ownership in the company to potential investors in exchange for money. Companies are able to sell their stock on markets that are open to the public, at least here in the United States, once they become public companies, which simply means that they have to adhere to a number of regulations outlined by the U.S. Securities and Exchange Commission, also known as the SEC.
Some of these regulations include publishing financial statements – these include a statement of retained earnings, statement of cash flows, income statement that shows revenues and expenses for a length of time, and a balance sheet that shows asset, liability, and equity account balances at a single point in time – publicly, having them reviewed and attested to by independent Certified Public Accountant firms that operate independently of the public companies they audit, and disclosing tons of other information to the Securities and Exchange Commission and, subsequently, the American public in formal financial and legal filings.
Before companies go public and trade their stock openly, they must submit themselves to an initial public offering. Also known as IPOs, initial public offerings are periods during which the public has its first chance to gobble up shares of stock of companies gearing up to go public. IPOs give private investors that previously provided funding to companies going public the chance to sell their shares of ownership and generate returns in exchange for having provided funding to such companies.
Peloton is one of the most recent United States companies to have filed appropriate documents with the U.S. Securities and Exchange Commission in an attempt to have its planned initial public offering approved by the almighty American regulator.
Earlier today, on Tuesday, Aug. 27, 2019, Peloton publicly revealed that it had filed such documentation, as well as shared other information with the world regarding its plans regarding its IPO and info related to other similar topics.
For Peloton’s most recently completed fiscal year, which closed on June 30, 2019, its sales grew a whopping 110 percent from the previous year, all the way up to $915 million from $435 million. However, Peloton’s net loss for the fiscal year nearly rose by a factor of five, growing from $47.9 million to $245.7 million.
Peloton shared today that it plans to bring in $500 million during its initial public offering. This money will be used primarily to expand its presence in international markets. Peloton is currently valued at about $8 billion.
Peloton’s IPO will include the sale of Class B shares, providing owners with 20 votes per share.