THE GHOST TRAIN
THE FINANCE GHOST: Investing in turnarounds
This is where you can make strong returns — or lose a great deal of money. So position sizing is key
A 35% jump in a single day — that’s what Peloton Interactive’s share price experienced after the company released results on August 22. The headlines were filled with everything from mass excitement around a resurgence to speculation on whether Apple should acquire the company. As the saying goes, the price drives the narrative.
When a broken growth stock gets some air under its wings, the results are spectacular. At Peloton, broken is indeed the word. The share price is down 82% over five years and that’s without considering the truly revolting drop from peak to trough. If the share price were turned into the profile of a cycling challenge, some of those gradients would just about kill you. It rocketed from below $20 to above $160 between March and December 2020 as the world went mad, before dropping gradually to $90 by October 2021. Then it plummeted to the current levels of below $5. ..
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