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Peloton Raises $1 Billion Using Convertible Notes

A few years back, you couldn’t escape the Peloton craze that was sweeping the nation. People who were looking to get in shape began using the high-priced exercise bike with online classes featuring instructors who then became stars on social media.

There are still plenty of Peloton warriors who jump on their bikes to take a class on a daily basis, and the company itself is cashing in — in more ways than one.

The company recently issued convertible notes, a form of short-term debt that combines the security of corporate bonds with the growth potential of equity. At a certain date investors can receive a modest return, similar to bonds, or convert their investment into company shares.

Initially, Peloton wanted to raise a whopping $1 billion through these convertible notes. Not only did the company succeed in raising $1 billion, but it actually went OVER that amount.

The convertible notes will not mature for five years in 2026, and there will be no interest paid on the notes until then.

Peloton isn’t the only company looking to grow in the fitness craze. Apple wants to move forward and raise money for their company with its Fitness+ service.

Other companies that have convertible notes include Square, Uber, Tesla, and the DISH.

Written by Matt Loede

Matt has been a part of the Cleveland Sports landscape working in the media since 1994 when he graduated from broadcasting school. His coverage beats include the Cleveland Indians, Cleveland Browns and Cleveland Cavaliers. He's written three books, and won the "2020 AP Sports Stringer Lifetime Service Award."

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