Rowan Street Capital: “Peloton (PTON) was a Costly Mistake for the Fund”

Rowan Street Capital, an investment management company, released its first-half 2022 investor letter. A copy of the same can be downloaded here. At the end of the first half, the fund is 57% down. The second quarter contributed the majority of the fund’s decline, which was -41%. However, at the end of July 20, the fund was 19% up.  For more information on the fund’s top picks in 2022, please check its top five holdings.

In the letter Rowan Street Capital discussed its major performance detractors like Peloton Interactive, Inc. (NASDAQ:PTON). Peloton Interactive, Inc. (NASDAQ:PTON) engages in the business of interactive fitness products, and is headquartered in New York, New York. The stock of Peloton Interactive, Inc. (NASDAQ:PTON) closed at $11.91 per share on August 11, 2022. One-month return of Peloton Interactive, Inc. (NASDAQ:PTON) rose to 42.81% and its shares lost 89.43% of their value over the last 52 weeks. Peloton Interactive, Inc. (NASDAQ:PTON) has a market capitalization of $4.018 billion.

Here is what Rowan Street Capital specifically said about Peloton Interactive, Inc. (NASDAQ:PTON):

“Peloton Interactive, Inc. (NASDAQ:PTON) has been a costly mistake for the fund thus far. We started a small position back in September of 2020 and added to it as the stock declined and the price got “cheaper and cheaper”.

We would like to walk you through the rationale why we bought the stock in the first place and why we added to the position. We will give you just a short summary in the main body of the letter, and for those who are interested in a more detailed version, we have included a write-up on Peloton in the Appendix at the end of this letter.

The trial is still out whether we made a mistake on the company, but we definitely made the mistake on the weighting of our position and the price that we originally paid…” (Click here to read more)

Peloton Interactive, Inc. (NASDAQ:PTON) is not on the list of  30 Most Popular Stocks Among Hedge Funds. As per our database, Peloton Interactive, Inc. (NASDAQ:PTON) was held by 44 hedge fund portfolios at the end of the first quarter, which was 60 in the previous quarter.

We discussed Peloton Interactive, Inc. (NASDAQ:PTON) in another article and shared Horos Asset Management’s views on the company. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.