Investment icon Bill Miller, founder of Miller Value Partners, said the firm is considering an investment in the connected-fitness company Peloton (PTON).
“We don’t own Peloton now, because they’re in the midst of a massive restructuring,” he told CNBC on Wednesday.
“But we are intrigued with the value of their subscribers and [new Chief Executive Barry McCarthy’s] evident experience with that both at Spotify (SPOT) and Netflix (NFLX). And it’s a great brand.” McCarthy had served as chief financial officer of both companies.
Peloton’s stock has plunged 67% in the past six months amid sluggish demand for its high-priced exercise bikes and treadmills. That led to the ouster of CEO John Foley, co-founder of the company, and to a 20% slicing of the corporate staff.
The stock has rebounded 53% in the past week amid talk that Amazon (AMZN), Nike (NKE) or some other company may buy Peloton. It recently traded at $37.15.
Peloton May Not Be the Answer to Apple's Fitness Ambitions
But a potential takeover isn’t what interests Miller in the company. “We’re not betting on that. We’re looking at the fundamentals of Peloton and thinking about it,” Miller said.
His firm has a history with the stock. “We bought Peloton on the IPO; we sold it very close to the highs,” Miller said.
“My colleague [Samantha McLemore] actually talked about buying it again when it was below the IPO price [$29]. We missed it at least on that trade, but it’s one that’s on our radar here.”
For the current quarter, Peloton sees revenue of $950 million to $1 billion and an adjusted loss of $125 million to $140 million.
