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Today's big stories

Peloton’s losses piled up last quarter
Hedge funds know how to profit even in tougher times, so here's what they're buying right now – Read Now
Salesforce posted better-than-expected results, but it’s only going to get tougher from here

Peloton Is Going Nowhere Fast

What’s Going On Here?

Peloton announced yet another massive quarterly loss on Thursday.

What Does This Mean?

You don’t have to be a financial expert to tell that a company is in dire straits when its own freshly minted CEO compares it to “a cargo ship in peril”. And it’s easy to see why: the number of subscribers to Peloton’s services didn’t rise at all last quarter from the one before, while the number of workouts on its equipment fell by a fifth (tweet this). That led revenue to plunge 28% in the same period, and its losses to scrape $1.2 billion – quadruple what it lost this time last year. Peloton’s expecting its revenue to come in well below analysts’ predictions too, which was the final straw for investors: they sent its stock down 7%, bringing its total drop in the last year to 90%.

Why Should I Care?

Zooming in: Look on the bright side.
There was a bright spot in Peloton’s results: it was the first time subscription revenue – which is much more profitable than equipment – made up the majority of its sales. There are rumors that it might even give customers access to its workouts via non-Peloton fitness equipment, which would help on that front too. And this would only be one step in its grand turnaround plan: the company has also cut costs by laying off thousands of workers and shuttering factories, with big ambitions to outsource its manufacturing to third parties.

The bigger picture: If in doubt, ask Amazon.
Peloton also announced this week that it would start selling its products on Amazon, having sold them exclusively on its own website up to now. It’s all in view of achieving its goal of positive cash flow in the second half of the next financial year, and analysts think it’s onto something: Amazon accounts for around 40% of all US ecommerce sales, so it should help reduce distribution costs while expanding Peloton’s reach even further.

You might also like: Is Peloton still a good investment?

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Analyst Take

Steal A Page From The Hedge Funds’ Playbook

Carl Hazeley, Analyst

Hedge funds are in the business of making money no matter what the markets do.

And in times like these – when the outlook is clouded by inflation, interest rate hikes, and recession risk – it can be good to take a look at what they’re up to.

I’ve recently done just that, and uncovered four big themes that you can take advantage of now.

So that’s today’s Insight: four investment ideas you can take from what the hedge funds are doing now.

Read or listen to the Insight here