With its cash flow turned negative by $522 million at the end of its September quarter, Peloton Interactive has decided to launch a secondary offering for 23.9 million Class A shares priced at $46 each to raise $1,099 million. It is also proposing an over-allotment of $150 million depending on the demand. The demand for the stock is there, as it appreciated by about 14 percent to $54 after the announcement, in spite of the implied dilution. Peloton’s share price hit a 52-week low of $46.70 after the company cut its guidance for its current financial year on Nov. 5, down from around $86 previously and compared with a 52-week high of $171.09. Strangely, Peloton’s management indicated in its conference call with analysts that it didn’t see the need to raise additional capital at this time.

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