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Questions Galore as Peloton Pedals Towards the Public Market—Data Sheet

Tuesday brought another fascinating if slightly less bananas securities filing from another tech, or tech-ish, unicorn startup planning to go public. Peloton Interactive, valued privately at more than $4 billion, sells exercise bikes, mainly, and also subscriptions to exercise programs. Sales have been strong, doubling to $915 million in its most recent fiscal year, though its net loss quadrupled to $196 million.

Perhaps thinking a simple story would bring too simple a valuation from Wall Street, Peloton is following in the footsteps of Snap the camera company and WeWork the community company. In it's S-1 filing, Peloton describes itself as an experience company. Oh, and also as a technology company, a media company, a logistics company, and a few more. To sum up, CEO John Foley, in a letter to investors, boils it down: "Peloton sells happiness." There are many questions to be answered, such as what is the real cancelation rate of Peloton customers over time, but a fast-growing company with an obvious path to profitability going public at less than 10 times its sales doesn't seem to be pedaling too fast to me. Stay tuned for more on Peloton.

The whole exercise (exercise, get it?) of analyzing trendy IPO candidates reminds me of a recent conversation I had with Mike Finley, the new CEO of Boingo Wireless. The company was early on the trend of helping travelers find Internet connections via premium Wi-Fi hot spots set up in convenient places like coffee shops and airports. It went public in May, 2011, under the stock symbol "WIFI," but got off to a rocky start, falling below its IPO price of $13.50 per share almost immediately and then spending most of the next…checks notes, rechecks notes…six years underwater.

Turns out, there just weren't that many people willing to pay that much money for Wi-Fi on the go when cellular service kept getting faster and faster. Prior CEO Dave Hagan realized that Boingo needed to pivot and moved resources away from the consumer market and towards telecom carriers that might want to piggyback their wireless phone customers on some of Boingo's extensive indoor infrastructure in airports and so on. It seemed to be working, at least for a time, and Boingo's long decrepit stock price (finally) climbed above the IPO mark and reached almost $36 a share by last fall.

Then the doors fell off again. Or should we say the signal grew weak? The business results remained steady, with revenue up 23% to $251 million for the year. But maybe investors didn't like the acquisition of Elauwit Networks, a small Wi-Fi play, or the borrowing of more than $200 million via a convertible note due in just five years. Or maybe they had expected more. Revenue growth slipped from a couple of quarters at 22% to 18% to 14% in the first quarter. In February, Hagan retired and the board brought in Finley, a veteran of the telecom business from Qualcomm who also did stints at Sprint, Verizon, Airtouch Cellular, and Cellular One. Since then the stock has continued falling, breaching the old 2011 IPO price. At yesterday's close, Boingo stood at $12.05, down 41% on the year.

Finley was talking up Boingo's latest deal, a long-term arrangement with Verizon to provide 5G connectivity to Verizon customers at the almost 70 venues where Boingo already provides other wireless options. Still, almost no one has a 5G phone yet and 70 venues, even big ones like the Oculus at the World Trade Center in New York City, seem like a pittance in the context of the global wireless market. I joked that maybe it's time to change the stock symbol, since Wi-Fi is no longer the main business. "We'll keep the symbol as it is–but point noted," he responded. Hopefully for Boingo investors, Finley will find a few other ways to grab the stock market's attention in coming quarters.

Aaron Pressman

On Twitter: @ampressman

Email: aaron.pressman@fortune.com

NEWSWORTHY

Off the menu. Speaking of bananas IPOs, I always thought WeWork had the semi-questionable business strategy and Spacious, which leased unused space from restaurants during the day to rent to mobile workers, was the clever one. But on Tuesday, the since renamed We Company said it was buying Spacious for an undisclosed sum. So it goes.

A triumphant return. Cybersecurity firm McAfee, bought by Intel in 2011, is looking at a return to the public markets as soon as this fall, Bloomberg reports. The company, which now is majority owned by private equity firms TPG and Thoma Bravo, hired Morgan Stanley and Bank of America to plan the deal.

Sticky fingers. Anthony Levandowski, the autonomous driving expert who jumped from Google’s Waymo to his own startup to Uber, was charged with stealing Waymo’s intellectual property and other crimes in a 33-count indictment filed on Tuesday. Levandowski’s lawyer said the engineer “didn’t steal anything from anyone.”

What we’ve become. A 17-year-old Palestinian boy admitted as a freshman to Harvard University was denied entry to the United States last week, after border officials spent hours reviewing the contents of his phone and laptop. Ismail Ajjawi, who lives in Lebanon, says he was deported due to social network posts of his friends, not his own.

FOOD FOR THOUGHT

Pricing a new product can be a complicated exercise in estimating costs and demands, but the cyber thieves who use malware to blackmail local governments seem to have nailed the perfect price. Turns out, most insurers are just paying the demanded ransoms rather than making their customers go through the costly and difficult process of restoring data from backups. In an investigative piece for ProPublica, Renee Dudley explores the challenge.

For insurers, it makes financial sense, industry insiders said. It holds down claim costs by avoiding expenses such as covering lost revenue from snarled services and ongoing fees for consultants aiding in data recovery. And, by rewarding hackers, it encourages more ransomware attacks, which in turn frighten more businesses and government agencies into buying policies. “The onus isn’t on the insurance company to stop the criminal, that’s not their mission. Their objective is to help you get back to business. But it does beg the question, when you pay out to these criminals, what happens in the future?” said Loretta Worters, spokeswoman for the Insurance Information Institute, a nonprofit industry group based in New York.

IN CASE YOU MISSED IT

Warner Bros. Interactive Expands, Opening New Free-to-Play Video Game Studio in San Diego By Lisa Marie Segarra

A Tale of Two Industries: Why Winemakers Are Hailing a G7 Victory and Tech Companies Are Crying Foul By Bernhard Warner

Why 20,000 AT&T Workers Went on Strike By Aaron Pressman

Peter Thiel Has Largely Sold All of His Facebook Stock By Chris Morris

For Tech Companies Going Public, an Unwanted Side Effect: IPO-Related Lawsuits By Rey Mashayekhi

Many Workers Would Choose Wearing Jeans to Work Over a $5,000 Raise By Chris Morris

BEFORE YOU GO

You already know that I have libraries in the brain, so just a quick pointer to the award from the World Library and Information Congress of the International Federation of Library Associations and Institutions–that’s a mouthful–for the best new library built last year. It went to the super-creative Helsinki Central Library Oodi, the focus of my essay back in February. Well done.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.