First, to the point of their subscription being high margin. This is not the case. As far as subscriptions go the margins aren’t very good. Also note that the subscription with better margins is tied to equipment purchases. Worse, they are one per household. Even if the house has multiple pieces of equipment they still only need one subscription. The subscriptions that are not tied to the equipment have almost no margin.
I sold mine about a month ago for essentially the same reason Saul advocated above here. It came down to a simple point for me. Do I want to spend my energy trying to figure out if the supply chain is going to deliver product smoothly in the current environment where shipping lanes are gridlocked and we’re in the middle of a pandemic? Do I really want to be figuring out a widget-selling company in the exercise equipment industry when I could be in one that can scale as effortlessly as one in SaaS? If I have the choice between peloton and any other company in my portfolio growing at the same velocity today, why would I pick peloton?
I am absolutely OK with taking a loss because I can leverage that at tax time. If you think about it in those terms you actually make a percentage back by selling at a loss. Taking a loss is something I never think we should let stop us from giving our dollars the best chance to grow from that moment onward. All that matters is the future, not the past.
The lesson I choose for myself here comes from the fact that I said all along I didn’t plan on being in this company long-term but was taking it quarter by quarter to see how I feel. Do I really need this kind of complexity in my life? I have plenty of other companies that I want to own indefinitely; until something meaningful changes. Looking back, this whole thing was more over-thought than it needed to be.