Peloton Interactive CEO and co-founder John Foley told CNBC that he sees his at-home fitness company as more than a maker of high-end stationary bikes and treadmills.
Foley brought “Squawk Box” co-host Andrew Ross Sorkin into Peloton’s live streaming classes control room at Tread Studio in New York City as the company prepares to make its stock market debut on Thursday, under the ticker symbol PTON on the Nasdaq.
Peloton priced its initial public offering at $29 per share, the top of its original range between $26 and $29.
“To the extent that we stream close to 1,000 hours of live television programming around the world every month, it’s hard not to say we’re a media company as well,” Foley said in an interview that aired Thursday.
“I mean, this is original programming. We have thousands of classes on-demand and we have almost a thousand live classes every month.”
Peloton’s bikes and treadmills and accompanying live video streaming and on-demand classes has earned it a loyal crop of users.
However, in the run-up to its IPO, questions have been raised about its long-term outlook as investors seek to understand its core business and path to profitability.
In the fiscal year ended June 30, Peloton reported sales grew 110% to $915 million from $435 million in fiscal 2018.
Peloton prepares to price IPO
But its 2019 net loss widened to $245.7 million, from a net loss of $47.9 million in the prior year.
In its S-1 initial public offering filing, Peloton said it is an “innovation company at the nexus of fitness, technology, and media.”
Critics, such as CNBC contributor and trader Pete Najarian, take a skeptical view.
“When they try to tell us they’re a media company and not an exercise company, that tells me a lot,” he said Wednesday on “Fast Money.” He compared Peloton to Uber, which claims it’s a tech platform not a transportation company.
But from early on, Peloton’s mission was to be more than just a bike maker or fitness-class provider, Foley told Sorkin.
The founders initially wanted to develop fitness software, but upon surveying the hardware landscape, they determined it was a “dog’s breakfast of uninspired” equipment, Foley explained.
“We decided we had to build the hardware.”
After talking with other companies about partnering on the fitness classes, Foley said Peloton determined it could “build more integrated experiences if we controlled the entire technology stack.”
Peloton is, however, facing a lawsuit from music publishers who allege that it used more than 1,000 songs from popular artists such as Lady Gaga and Drake without permission.
The company also has faced criticism over the price of its equipment and classes.
But Foley told Sorkin price is situation the company wants to address.
Disclosure: CNBC parent Comcast-NBCUniversal is an investor in Peloton.