Match dot con

MARKETS

• U.S. markets: Despite the Daytime Emmy-winning drama in D.C., stocks managed to climb. President Trump said a U.S.-China trade deal could happen sooner "than you think."
• Trade: As for USMCA, a trade deal with Mexico and Canada, President Trump said he’s not sure House Speaker Nancy Pelosi will “have any time” to sign the agreement with the impeachment inquiry heating up.

IPO

Peloton Gets Wall Street's Blood Pumping

If you didn't post it on Instagram, did you even work out?

Same goes for 2019 IPOs. If you don’t lose money, are you even listing shares? The latest red-ink unicorn to IPO is exercise equipment/connected fitness subscription company Peloton, which will list shares on the Nasdaq today.

Time to clip in and tap back—here are the details on Peloton’s IPO.

The 3 Ms of hitting the wall

Money: Peloton’s revenue has more than doubled in the last year, but losses have more than quadrupled. The equipment is pricey—bikes cost $2,000, treadmills cost 2x that, and a subscription for streaming classes costs $39/month.

Motto: In an IPO prospectus ripped from The Secret, Peloton said it aims to sell “happiness,” and it identifies as “a technology company, a media company, an interactive software company, a product design company, a social connection company, a DTC retail company, an apparel company, and a logistics company.” No blockchain?

Music: The National Music Publishers’ Association is seeking $300 million in damages from Peloton for allegedly using unlicensed music in classes. (Peloton's paid $50 million in music royalties.)

Those endorphins tho

After watching some high-profile listings crash and burn this year, Peloton’s hoping its IPO goes down as smooth as a protein shake with banana and flaxseed oil.

• After pricing shares at $29, Peloton is worth slightly less than nine times trailing sales...a “refreshingly realistic” valuation, per the WSJ.
• For context, Zoom Video, CrowdStrike, and other hot IPOs this year have been priced above 25x trailing sales.

Plus, Peloton has 500,000+ super-fit evangelists. The average workout per subscriber is now more than 12 per month, double that in Q1 2017. Average net monthly churn for subscribers has come in under 1% every quarter since 2017.

+ Want more Peloton talk? Retail Brew writer Halie LeSavage is interviewing a Peloton co-founder at the Nasdaq this morning. You can subscribe to Retail Brew for all the sweaty details in Friday’s edition.

C-SUITE

More Like Chief Exit Officer

This week, CEOs are getting booted like they forgot to reorder the seltzer.

1. Juul CEO Kevin Burns had to gather his things yesterday as the regulatory pressure reached a boil. K.C. Crosthwaite, former growth chief for Juul investor Altria (-0.42%), will step in.

• A proposed tobacco mega-merger between Altria and Philip Morris International (+5.20%) was also scuttled yesterday, most likely over the same scrutiny swirling around the e-cig industry in recent weeks.

2. EBay (-0.80%) CEO Devin Wenig’s also headed for the exit after disagreements with the e-commerce giant’s board. CFO Scott Schenkel will take the reins for the time being, but he’ll face some challenges. EBay’s dealing with problems from the…

• Inside: Activist investors are pushing for spinoffs.
• Outside: Buyers and sellers are flocking to an online marketplace best known for streaming Fleabag.

3. And of course...WeWork co-founder and CEO Adam Neumann is out.

Zoom out: August CEO turnover in the U.S. reached an all-time monthly high at 159 chief executive changes. One hypothesis? Execs are facing more accountability as boards brace for a possible economic downturn.

ONLINE DATING

Finally, a Lawsuit Against Misleading Dating Profiles

Yesterday, the FTC filed a lawsuit against Match Group (-1.91%) alleging that the online dating company defrauded users of its Match.com service from June 2016–May 2018.

The alleged Match Dot Con:

• First, non-paying Match users would receive an email claiming someone had sent them a message. To read it, they’d have to subscribe to the service.
• Once people paid up, the message would disappear...because the “admirer” was actually a scammer.
• If users tried to get their money back, Match would deny wrongdoing.

The FTC alleges Match both a) knew the initial, misleading messages were fraudulent in some cases and b) profited from them, adding 499,691 new subscriptions from people who'd seen an advertisement "touting a fraudulent communication" within the previous 24 hours.

Match’s rebuttal:

• It denied the allegations and plans to challenge them in court.
• CEO Hesam Hosseini characterized the allegations as “outrageous” and said the majority of what the FTC calls scammers were actually bots, spam, or merchants.

Zoom out: Match Group owns Tinder, Plenty Of Fish, Hinge, OkCupid, and your Sunday nights.

ENVIRONMENT

Green Bonds and Ham

Yesterday, we attended the Bloomberg Global Business Forum to hear the musings of the rich, the powerful, and the tall. You haven’t truly craned your neck until Mutombo plops down in front of you.

So what’s on everyone’s mind? Sustainable investing.

Presenters like incoming European Central Bank President Christine Lagarde and Goldman Sachs CEO David Solomon focused on the increased role of Wall St. in funding green projects.

Reality check: Solomon said sustainability-linked investments only account for 1% of total capital markets activity. But…

• Goldman and other banks are conjuring up bonds that get cheaper for borrowers who meet sustainability targets.
• Solomon said climate concerns among clients have "amped up materially" in recent years.

One thing all financiers agreed on? “The finance world is moving much faster than the sovereign world,” said Axa Chairman Denis Duverne. All morning, we heard complaints from execs that their efforts are made tougher by a lack of standardized climate policies across countries.

Zoom out: Also yesterday, the UN’s IPCC released another alarming report describing warming oceans.

BOOK REC

Dan Schawbel Just Wants You to Be a Human

Have you ever had an entire conversation on Slack with a coworker who sits directly next to you? Is working remote not living up to the hype as you make your 15th lap around the living room?

You’re not the only one. More people are feeling dissatisfied with their jobs or disconnected and lonely at work...even though they have a suite of tools at their fingertips promising connectivity, communication, and inclusion.

When it comes to figuring out what millennials need to succeed in their careers, good luck finding a better expert than career coach and serial entrepreneur Dan Schawbel. His latest book, Back to Human, helps you figure out what’s not working at work and how to reconnect when technology pulls us further apart.

For the latest edition of our Pumpkin Spice Author Series, Dan sat down with the Brew to discuss his book, the key to creating meaningful relationships in the workplace, and strategies for putting down those devices.

WHAT ELSE IS BREWING

• Amazon (+1.53%) unveiled a forest of new Alexa-enabled products, including a new version of the popular Echo Dot speaker with a clock front and center.
• Boeing (+1.19%) has reportedly settled the first claims related to the Lion Air crash in Indonesia last year. Families of those killed could get at least $1.2 million each.
• The average cost of family health insurance offered by companies jumped 5% this year to top $20,000 for the first time, per the Kaiser Family Foundation.
• The International Monetary Fund has tapped a new managing director in Bulgarian economist Kristalina Georgieva.
• Arby’s parent Inspire Brands is acquiring mayonnaise purveyor Jimmy John's. We expect the deal to close so fast you will in fact freak.

BREAKROOM

Mind the Map
On this map from The Economist, what do the areas in red have in common?

Breakroom Answers

Mind the Map
Countries and states that have legalized medical cannabis (Source: The Cannabis Legal Report, Prohibition Partners)