Peloton stock fell 3.3% in premarket trading on Tuesday after the gym equipment maker announced a $1 billion equity sale.
A greenshoe option of up to $150 million in Class A shares is included in the offering.
The stock fell 3.5% to $47.49 on Monday. If the sale proceeds at this price, the offering would represent around 7% of the company's equity, or 8% if the greenshoe option is exercised.
The stock could end up in three places, according to Peloton: organizations linked with Durable Capital Partners, accounts managed by broker T. Rowe Price, and TCV, one of whose co-founders is now a Peloton director.
Since the company's November 4 results announcement, when it lowered its annual revenue projection by as much as $1 billion, the stock has dropped roughly 44%. At a time when gyms were reopening and the first pandemic-driven fitness equipment surge was diminishing, the firm underestimated demand for its home training equipment. In the first quarter, revenue increased by only 6% to $805.2 million.
In the current year, Peloton estimates yearly revenues of no more than $4.8 billion and as low as $4.4 billion.