The three symbols he names: $PTON $CVNA $FRPT
Peloton and 2 other major ‘zombie’ companies could soon go to $0, leading stock research firm CEO says
BY
WILL DANIEL
June 23, 2022 1:21 PM EDT
https://fortune.com/2022/06/23/zombie-companies-stocks-to-ze…
Trainer warned investors in 2021 that many high-flying tech stocks and IPOs at the time were trading at “tech bubble” levels. And even worse, some were what he calls “zombie companies,” or firms that are unable to generate enough cash flow to cover their debts, forcing them to continually borrow in order to stay alive. You’ve probably heard of some of these zombies, like the workout-bike maker Peloton.
And Trainer has credibility here: His firm’s website says its cutting-edge use of machine learning to analyze markets has vaulted it to the front of its field, yielding partnerships with many hedge funds and information providers including Refinitiv and Ernst & Young.
Now, with the Federal Reserve aggressively raising interest rates in order to combat levels of inflation not seen in four decades, Trainer argues that some of these zombie companies could see their stock prices fall to $0 as the cost of borrowing soars.