Elon Musk’s Next Billion-Dollar Venture Is in Motion Right Now

This fitness product is one of the most futuristic I've ever seen. It's like Pelaton on steroids... Picture the biggest iPhone or Android screen you've ever seen. Now blow that up by a factor of 50x-100x and you get something like this… That is Interactive Strength's Forme Studio, a $2,500 interactive fitness mirror for the agoraphobe that wants to maintain that healthy physique. All jokes aside, this fitness product is one of the most futuristic I've ever seen. It's like Pelaton on steroids. Interactive Strength (NASDAQ: TRNR) just finished its IPO in late April, pulling in a healthy $12 million from the sale of its 1.5 million shares. While IPOs fell out of style for quite a while, I've seen several in the last few weeks, making me think this could be a hot theme for the next few months. And if you're looking for a low-float idea with a sweet product, then TRNR might be your best bet. Interactive Strength Inc. (NASDAQ: TRNR) 1-month trading range: $3.50- $6.75 Typical average daily volume: 150,000 Float: ~ 12.14 million Interactive Strength's Business If you know about Peloton, understanding Interactive Strength's business model should be simple. The company produces two products: a giant interactive display mirror and the same thing but with resistance arms. Source: Interactive Strength's Roadshow Deck April 2023 Customers pick up the giant mirrors straight up or financed. But instead of large classes, users sign up for 1 on 1 training with a personal trainer. This high-end customization gives you: Access to a qualified fitness professional that can be easily switched A personalized plan every week Progress tracking towards your fitness goals On-demand classes The company's mission is to "reinvent how we take care of ourselves through the power of coaching and to usher in a new era of health, happiness, and longevity."' Apparently, that means a connected fitness platform that costs a fortune. But, from the reviews listed on the website and a few I came across on YouTube, I wouldn't mind having one if it didn't cost so much. Financials Source: Stockanalysis.com As new company, we don't have much to go on for the financial picture. We know the company double sales from 2021 to 2022, though they haven't broken $1 million yet. What they have sold was at a gross loss. So we can assume the hardware itself isn't profitable. And at the moment, they burn about $35 million annually in cash. So, it's kind of hard to see how they wouldn't need to raise cash again within a quarter or two. In fact, the financing seems rather odd, doing a $12 million IPO when you burn through that much cash every year. However, that may not be the entire story, as the slide below from their investment deck shows that the purpose of the proceeds is for general corporate purposes. Source: Interactive Strength's Roadshow Deck April 2023 Promoter Activity To date, I have received one promotional email related to TRNR, which isn't surprising given its newness. The promoter's main focus is the size and growth of home and interactive fitness markets, relating it to other success stories like Planet Fitness (PLNT), Lululemon Athletica (LULU), and Peleton (PTON)...though maybe the last one might not be a great comparison. Some surprising stats about the virtual fitness market include: 39.4% CAGR from 2022 to 2023 36.9% CAGR through 2027 Total market size of $21.82 billion this year Online fitness and training was the number one ranked top fitness trend around the globe. The promoter also highlights some technicals that had already changed by the time I read the email. So I won't bother with them here. What I will point out is after a drop on May 5th, when shares plunged by ~50%, they've made back all those gains in the last week. So, if you're looking for volatility, as traders often do, this stock has plenty of it. Lastly, we'll point out the promoter received $25,000 for their one-day promotional campaign on May 18, 2023. Straight to the Facts Normally, I wouldn't give a stock like this much thought. However, I have two reasons this is going to spend some time on my watchlist. First, it's a recent IPO, and I've seen a lot of activity around these stocks lately. Second, the product is so unique and interesting it's begging for a press release about a partnership or other alliance. If nothing happens with this ticker for a few months, then so be it. But it doesn't cost you anything to keep an eye out.   Always at your service,  Baron Von Stocks Disclosure: I am not a fin-an-cial adviser. All potential percentage gains are based on from the low to the high of day. 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