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This is an email from Buy/Sell/Hold, a newsletter by Marker.

The problem with the Peloton Economy

Welcome to Buy/Sell/Hold, Marker’s weekly newsletter that’s 100% business intelligence and 0% investment advice. Each week, our writers Steve LeVine and Rob Walker make sense of the most important developments in business right now — and give them a Buy for clever moves or positive trends, a Sell for mistakes or missed opportunities, or a Hold if they’re noteworthy but too early to call.

🚴 The Peloton Economy is a mirage 🚴

The Buy/Sell/Hold Analysis

It’s been widely — indeed, endlessly — noted that Peloton has been a rare “winner” of the pandemic. With gyms reeling, many have opted for the high-tech home bike system, which involves a $1,900 piece of hardware and a $39 monthly subscription for custom exercise classes. The latest dramatic twist: Now the eight-year-old publicly traded company is reportedly “threatened” by its own struggles to meet the demand and fulfill orders for impatient customers. “The hype surrounding Peloton is like no other,” one analyst told the New York Times earlier this week.

This insulated slice of America — the million or so Peloton owners and their professional-class peers Zooming and home-ordering from Whole Foods through the pandemic recession — is the Peloton Economy. It’s gotten quite a bit of attention in a year when health and economic forces have simultaneously upturned and ended lives month after month. But ultimately, we need to face up to the fact that the Peloton Economy is not a bellwether — it’s a warning signal underscoring a serious problem that should be a top priority not just for the new Biden-Harris administration, but for business at large.

For the millions of Americans who experienced the coronavirus era as a calamity of lost jobs, lost health care, and stunted wages, the Peloton Economy is an alternate universe. As Marker’s Steve LeVine noted recently in a skeptical take on the theory that we’re entering a new Roaring Twenties, “The pandemic has deepened the modern U.S. wealth gap: The top 1% holds 15 times as much wealth as the bottom half combined.”

Covid-19 obviously did not cause income inequality, but as with so many issues, the virus has laid bare and exacerbated this deep national flaw. DealBook’s Andrew Ross Sorkin recently reported on a manifesto-like document being circulated by an advisory group to JPMorgan Chase, made up of business and policy leaders. Their message in part: “Unless and until the core problem of inequality is addressed, all other overarching objectives and desires will remain elusive.” In other words, business has “a commercial stake in advocating for a fairer, more equitable system” because that’s what expands the marketplace in the long run. The big-picture economy transcends the short-term interest of any single player.

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The new presidential administration faces an array of urgent crises — public health, economic despair, racial injustice, climate change — but addressing income inequality is a theme that runs through all of them. That needs to be backed with concrete steps to directly help those who need it most, like the new round of proposed Covid-19 economic relief that reportedly includes boosting the federal minimum wage to $15 an hour. (It’s been stuck at $7.25 for about a dozen years; that’s around $15,000 a year for a full-time job.) Or serious tax reform that rolls back Trump-era breaks for corporations and the wealthy. Or additional stimulus money put into mainstream hands to get pumped back into mainstream businesses like restaurant chains — proof of why it’s in companies’ best interests to exercise their newfound political courage to back efforts that address inequality head-on.

With a nation facing as many intersecting dilemmas as this one, the Peloton Economy — hyped through slack-jawed reports of that company’s 5X stock price rise over the past year — isn’t just a distraction. Ultimately, it’s a damaging sideshow. As of September, about 1.3 million people owned Peloton equipment. As of December, before Congress acted to extend unemployment benefits, an estimated 12 million people were on the verge of being pushed into “some form of destitution,” as the New York Times put it. Which group is more important to our shared economic future?

Verdict: Sell

— Rob Walker

⚡Lightning Round⚡

Bumble makes the first move to go public. The women-first dating app company founded and run in 2014 by Tinder co-founder Whitney Wolfe Herd made its IPO filing last week and may seek a valuation between $6 billion and $8 billion, according to Bloomberg. Wolfe Herd and Bumble have taken a somewhat circuitous route to this moment: The company began as a subsidiary of a dating app called Badoo and then sold a majority stake to the private equity firm Blackstone in a $3 billion deal that made Wolfe Herd the CEO of both brands and saw the exit of majority owner Andrey Andreev following allegations of misogyny and tax avoidance in a 2019 Forbes exposé. When the company finally goes public, it will have the distinction of being one of the tiny fraction of companies founded and led to IPO by a woman. Hold.

Netflix had a boffo 2020, surprising no one. If you thought the OG streaming superstar might benefit from a year of shutdowns, you’d be right: Netflix passed 200 million subscribers in 2020 and brought in $2.76 billion in profit — a whopping 48% more than it earned in 2019. Despite new streaming rivals like Disney+ and Peacock, the FAANG-worthy tech titan has proven it can maintain its lead even without beloved original IPs like Star Wars and The Office. Instead, it will rely on its time-tested mix of enormous content variety and volume, simple and stable pricing models, and its famed recommendation algorithm and data-collection prowess — which will only grow stronger with 200 million subscribers under its belt. Buy.

The e-commerce revolution is surprisingly old. On Thursday, the Washington Post reported that among customers who suddenly shifted to digital retail during the pandemic, consumers 65 and older — the age group most at risk from Covid-19 — were the fastest-growing group of online shoppers from January to October 2020. This new influx of senior shoppers reluctant to return to stores may be yet another shutdown-induced lucky break for e-commerce platforms: According to the Washington Post, shoppers 60 years old and over order groceries on Instacart 25% more frequently and spend 35% more on household items than younger shoppers, a sign that this newly converted customer base could be highly lucrative if they remain loyal to their new habits post-pandemic. Buy.

Big business picks up more vaccine slack. On Thursday, Chobani’s president announced the yogurt company would cover six hours of paid time for employees who receive Covid-19 vaccines, mirroring similar policies from Aldi, Dollar General, Trader Joe’s, and Instacart. While some companies are offering payment in exchange for vaccinations in lieu of government-led financial incentives, others are stepping up to help fill gaps in the vaccine rollout strategy: On Monday, Washington state announced a partnership with Starbucks to help “optimize vaccination sites with design principles and solutions focused on efficiency to thruput,” and on Wednesday, the CEO of Amazon’s worldwide consumer business wrote President Biden, offering to leverage the e-commerce giant’s “operations, information technology and communications capabilities and expertise” to assist with vaccination efforts. Buy.

📈 The Number*: $5.5 million

That’s how much ViacomCBS wants advertisers to pay for 30-second ad spots during Super Bowl LV on February 7.

Variety reported that earlier this month, both Pepsi and Coca-Cola decided not to air ads during the annual sporting event, historically the most coveted arena for the soda giants to put their rivalry on display. While Fox, which aired the 2020 Super Bowl, sold out of ad spots for that event by November 2019, earning $435 million in ad revenue, ViacomCBS is yet to sell out its ad inventory for this year’s Super Bowl with only a couple weeks left before the game. What’s more, 2021 marks the first year in a decade where the price of a 30-second ad spot has gone down rather than up, dropping from an all-time high of $5.6 million last year.

The price drop and remaining unsold ad slots reflect advertisers’ anxieties around whether the coronavirus could disrupt this year’s Super Bowl and their cautious spending in a challenging economic environment. (Plus, with no national election on the horizon, you won’t have Trump and Michael Bloomberg dropping $10 million each in dueling political ads during the event.) Overall TV ad spending commitments for 2021 could be down by as much as 20%. Tough news for folks who only watch the Super Bowl for the ads.

— Kaushik Viswanath, Senior Editor, Marker

*For more fascinating figures pulled straight from the day’s news, check out Number Crunch (formerly Number of the Day) on Marker, with a new number each weekday morning.

📖 Marker Read of the Week: Once we’re all vaccinated, will the 2020s really become the next Roaring Twenties? Hint: it’s all about innovation.

🔎 Marker’s New Fixation 🔎

One of the biggest advantages of working from home is the illusion of privacy. Yes, your emails, Slacks, Google Docs, Zoom recordings, and — if you have a company phone — calls and texts are all more or less free game for a snoopy employer. And yes, every second you’re on a video call is a second you can’t freely eat a meatball sub in your bed. But even within these parameters, as long as your work gets done and you are responsive, remote workers don’t have to worry about answering doctors’ calls with hushed tones in the stairwell or smiling when you don’t feel like it — a small but powerful vestige of emotional privacy. Unfortunately, even emotional privacy may be in jeopardy for some stay-at-home employees: On Sunday, BBC reported on the startup Moodbeam, which produces wearable wristbands with yellow and blue buttons that remote workers can push to indicate when they are happy or sad, respectively. The data is then reported in a dashboard to their managers, who can address it as they see fit. Ignoring the obvious dystopian elements of this Big Brother–meets–Clockwork Orange setup, workers should be very wary of products like Moodbeam’s that facilitate half-hearted attempts by companies to genuinely address employees’ well-being. If companies are really worried about workers’ happiness during a pandemic and beyond, they have options available that don’t involve quantifying and tracking their moods: They can provide more time off, pay for mental health services like therapy, hire additional workers to relieve workloads, and in some cases simply raise salaries. The wristbands, I’m guessing, would be the cheaper option of the bunch.

— Jean-Luc Bouchard, Senior Editor, Marker

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Jean-Luc Bouchard

Jean-Luc Bouchard


Bylines in Vox, VICE, The Paris Review, BuzzFeed, and more. Contributor to The Onion. Check out my work here: