Adam Neumann’s real estate company gets backing from Horowitz, Peloton lays off over 800 people

Yahoo Finance Live anchors discuss two other leading business stories on WeWork's Adam Neumann and Peloton's cost-cutting measures.

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[MUSIC PLAYING]

BRAD SMITH: Welcome back, everyone. It is time for "Cut for Time." Two stories, one minute each. Today, we start with this. WeWork founder Adam Neumann has a new venture and a surprising new backer. Neumann reportedly starting a new company called Flow, which is focused on the residential real estate market and has the financial support of Andreessen Horowitz. Horowitz, of course, an early investor in companies from Facebook to Airbnb. OK, let's chat about this here. More funding for Adam Neumann after WeWork is now valued at--

JULIE HYMAN: WeWork is now--

BRIAN SOZZI: I'm kicking this one to Julie.

JULIE HYMAN: WeWork is now valued at about $4 billion. $47 billion was the peak valuation of WeWork. He walked away with hundreds of millions of dollars. This new company Flow-- and this all according to "The New York Times," by the way-- this new company, through Neumann, he's basically bought 3,000 residential apartment units. I believe it's multifamily. It's apartments. And it's going to be-- I mean, this is effectively a new version of what he had envisioned--

BRAD SMITH: WeLive.

JULIE HYMAN: --as part of the WeCo, right. That this is going to be all branded the same as Flow. And--

BRIAN SOZZI: Are we supposed to flow into these places? I mean, this is just-- this is ridiculous.

JULIE HYMAN: I mean, it's amazing that after the story that we're-- and this is the--

[BUZZER]

--largest single investment that Andreessen Horowitz has ever done in this round.

BRIAN SOZZI: We wish them well. All right, the future is looking gloomy for Peloton after the company announced a $500 price hike to its bike and $800 jump in its Tread price after it had to cut prices back in April. The company also announced close to 800 job cuts.

And guys, we saw Peloton shares-- this broke late on Friday. Peloton shares popped on Friday close to 20%, giving back some of those gains today. And, you know, I obtained a letter from CEO Barry McCarthy, who took over-- I believe it's late in February, noting this. He said, quote, "Cash is oxygen. Oxygen is life. We must become self-sustaining on a cash flow basis."

JULIE HYMAN: It makes sense.

BRIAN SOZZI: It makes a lot of sense. And look, Barry was born with a very specific mission to cut costs, get profitability correct. And he won't say this, but this is going. At some point, Peloton will be sold within three years. That's what he is setting the stage to do because I see these cuts as a clear sign demand has not come back. We've talked to gym chains last week, Planet Fitness exponential. Good results. Here, you have Peloton cutting jobs. So the at-home fitness market, that bubble has popped and Peloton struggling.

BRAD SMITH: Well, sales, they're also your water as well in that less--

[BUZZER]

--expectancy. And moving forward-- well, I got buzzed, but anyway.

JULIE HYMAN: I like all these analogies, guys.