With ad hoc acquisition companies (After-sales service) controlling over $ 1 trillion in purchasing power, any fast-growing company would be crazy not to rate going public at this time.
Against this background, it was reported last week that Equinox was in talks with several PSPCs. If the fitness business hits the public markets, could it be an investment that beats the market?
Equinox against the competition
It’s no surprise that investors are interested in fast growing healthcare companies. After IPO for $ 29 per share in September 2019, platoon (NASDAQ: PTON) soared during the pandemic. Today, its shares are trading north of $ 110.
Equinox raised funds from Silver Lake Partners in February 2020 with the aim of expanding its digital offerings and may be even challenge the business with home fitness products. (Its SoulCycle subsidiary recently launched its At-Home bike that directly competes with Peloton.)
However, the heart of Equinox’s business is its gym and training club business. Gyms obviously fell out of favor during the pandemic, as restrictions forced many people to close or face heavy customer losses. Planet Fitness (NYSE: PLNT), which traded at $ 87.52 on February 21 of last year, saw its stock price drop to $ 33.93 in one month.
With the United States vaccinating more than 3 million people a day and many states lifting restrictions, gym stock prices are picking up again. Planet Fitness is now less than 13% of its record share price.
IPO or not IPO
Given this environment, you can see why it is wise for Equinox to consider joining public markets. 2021 saw a wave of IPOs, SPAC mergers, and even direct listings as investors took over high-growth companies.
While interest in many recent public debuts has waned, Equinox’s positioning as a “reopening stock” is expected to generate higher interest than competing offerings in industries such as EVs or SaaS software which have become saturated with public debuts.
Reports say Equinox could get a valuation of $ 9 billion with any company that acquires blank checks. That would make it more valued than Planet Fitness ($ 6.8 billion), but significantly lower than Peloton’s $ 33.4 billion market cap.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.