How Investor Relations Can Help Peloton
- stevenrubis
- Feb 5, 2024
- 2 min read
How Investor Relations Can Drive a Turnaround at Peloton
Great Investor Relations is about communication. Can the Company and IRO communicate the investment thesis in a way that is broadly accessible to investors.
When a stock is down 30% since earnings, like Peloton, or the company represents a multi-industry cross-over, that task becomes more difficult.
You have to sell the same investment thesis in multiple different investor languages.
The question for IR becomes how do you scale the story across these verticals in order to make the story attractive and accessible for as wide an investor base as possible?
Using Peloton ($PTON) as an example, the IRO has two levers at his or her disposal: Narrative and Strategy.
Two Ways IR Can Help
1. Narrative: Set the Right Secular Growth Themes
2. Strategy: Can IR Help Management to Better Monetize the Business
Successfully puling these levers can unlock significant shareholder value for Peloton.
How Do You Scale the Narrative? Pick the right secular growth themes.
Peloton benefits from three secular growth themes accessible to nearly all investment verticals
Digitizing the Undigitized: Peloton removes the friction point around getting the best physical workout experience for both instructors and users. A workout is no longer limited by time, space, and geography.
Network Effects: A large base of workout content attracts users, as users grow, more content and workouts are needed to keep and attract more users. The system feeds itself over time.
Content Curation: Getting users to the right content to stack micro workouts and avoid repetition and boredom creates a sticky user experience and long-term customer retention.
An IRO can utilize these three secular growth themes to scale across multiple investor verticals and create a powerful and simple investment thesis that Peloton = Netflix 2.0!
Anyone can understand an investment thesis that simple!
The second piece is utilizing strategy to help management better monetize the business.
The narrative and strategy need to be based on the monthly subscription business, and then determining how to add ancillary, yet complimentary services to the platform that will incrementally increase the subscription rate over time.
Scaling the narrative plus optimizing monetization of Peloton creates the Netflix 2.0 investment thesis allowing investors to see a future take out at 4x sales by Amazon, Apple, Facebook, Google, Netflix, among others!
Remember unlocking shareholder value is about great IR communication combined with management execution!
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