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Peak Skis Investment opportunity

fatbob

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Seems like if I "invest," I am just giving them capital. Normally when I invest, I get shares of a stock. Why not just offer an IPO?
Yeah no way they are serious enough to IPO. Plus can you see Bode ever playing well with public investors that might demand his genius is directed first and foremost at giving them a return. So he walks and then what do you have?

It's somewhat concerning that they have obviously thrown some time and money at this funding for what is relatively small beer in cash while making it abundantly clear how their model isn't working yet. And the funding window is weird - they've basically left it open til the end of the season. Surely easier for Bode and Andy to reach into their own pockets and find another $100k each if they still believe. Then us peanut schuckers would have less to throw.
 

dovski

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So a couple thoughts:
  • You have to think of Peak Skis as an early stage startup. They are basically looking for Angel investors, friends and family because their business and revenue is not yet mature enough for institutional investors or an IPO.
  • With the Bogo last year they were absolutely trying to clear out a lot of unsold inventory, so a lot of their skis went out the door for half price which crushed their margins big time. 5000 ski at $1k a pop should have brought in $5M but they only brought in $1.7M which mean their average price per ski out the door was $340. So not only do they have a sales volume issue, but they have trained folks to buy their skis at a massive discount .... and premium products never discount especially not like that.
  • Inflation has impacted everyone and from what I hear from my friends luxury items are just not selling in the volumes they used to, so not a great time to launch a super premium ski company.
  • Also with inflation labor and manufacturing costs are way up which also does not bode well (pun intended) for any hard goods startup

My guess is that this year is sink or swim for them. They have to sell more skis and they have to reduce their discounting ... both are crucial to their survival. What is interesting is that they have already raised over $250K through their crowdfunding, so will be curious to see how much they actually clear. My guess is at a certain point they may introduce a package that includes a pair of skis or something like that, I mean $1500 for a pair of skis, Stio vest and hat plus "ownership" in the company would make much more sense to me, and for them it is all about cash flow. Here is hoping they figure it our, weather the storm and make a go of it.
 
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fatbob

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@dovski. Don't disagree with much of that. Except they sold $2.8m so at an estimated 5000 pairs I was crediting them with an average $560 tag I.e. some sold at the full $900 plus the BOGOFs.

Obviously their huge overhead has to be questioned. Then there is the real price point issue. To cover their costs they need to be a volume shifter, and rather than sticking a $200 price rise on the product which they are having to discount away all the time anyway I suspect they'd have been better sticking at a price which is no higher than top end mass market models so in the $800- 900 bracket.

The other issue is they've already sold to those skiers most easy to reach and in fact have given them 2 pairs. So the next sales come harder even to those with a buddy advocating for them when you know buddy paid 50 off.

Make or break indeed. Think I'll ask anyone I see on Peaks this winter what they paid for them.
 

dovski

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I've got a couple of obtuse ones I could donate, but I'm keeping the acute and right angles for myself!

(Sorry, couldn't resist... :P )
I hereby bud they moderator and copy editor extraordinaire lol
 
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Wasatchman

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I'm rooting against them. Some interesting tidbits from the financial disclosures:

On July 19th, 2023, a marketing agency that the Company has engaged from time to time for marketing-related services, filed
a complaint in California Superior Court in San Diego County, alleging approximately $875,000 in damages based upon
outstanding amounts allegedly owed by the Company to for services rendered to the Company. The Company is seeking to
resolve the dispute in good faith in order to avoid the time and expense of protracted litigation. An agreement that is awaiting
signature has been agreed upon by both parties which outlines a feasible payment plan for the Company so that the complaint
/ litigation is dropped

Additionally, the company has nearly $155,000 worth of company cars on the books including a truck that the company bought from a co-founder of the company. So in addition to pulling a salary It seems like they get company cars of which one of them was purchased from a co-founder noting this disclosure

"A co-founder agreed to sell his truck to the Company in exchange for $53,000. The Company balance was $13,250 as of July
31st, 2023. The payable does not accrue interest and was fully paid off in October of 2023."

And now they are offering this BS "investment " to the public which is almost certainly to become worthless. The terms of this "investment" are egregious enough to warrant the following disclosure

"The Investor represents that the Investor understands the substantial likelihood that the
Investor will suffer a TOTAL LOSS of all capital invested, and that Investor is prepared to bear the risk
of such total loss."

Sorry but I'm hoping they fail. I love how total loss is written in all caps. Well, they can't say people weren't warned.
 
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Wade

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I'm rooting against them. Some interesting tidbits from the financial disclosures:

On July 19th, 2023, a marketing agency that the Company has engaged from time to time for marketing-related services, filed
a complaint in California Superior Court in San Diego County, alleging approximately $875,000 in damages based upon
outstanding amounts allegedly owed by the Company to for services rendered to the Company. The Company is seeking to
resolve the dispute in good faith in order to avoid the time and expense of protracted litigation. An agreement that is awaiting
signature has been agreed upon by both parties which outlines a feasible payment plan for the Company so that the complaint
/ litigation is dropped

Additionally, the company has nearly $155,000 worth of company cars on the books including a truck that the company bought from a co-founder of the company. So in addition to pulling a salary It seems like they get company cars of which one of them was purchased from a co-founder noting this disclosure

"A co-founder agreed to sell his truck to the Company in exchange for $53,000. The Company balance was $13,250 as of July
31st, 2023. The payable does not accrue interest and was fully paid off in October of 2023."

And now they are offering this BS "investment " to the public which is almost certainly to become worthless. The terms of this "investment" are egregious enough to warrant the following disclosure

"The Investor represents that the Investor understands the substantial likelihood that the
Investor will suffer a TOTAL LOSS of all capital invested, and that Investor is prepared to bear the risk
of such total loss."

Sorry but I'm hoping these hucksters fail. I love how total loss is written in all caps. Well, they can't say people weren't warned.
They seem to have made some missteps in trying to grow quicker than may have been achievable, and it seems from these disclosures they've made purchasing / comp / investment decisions that I wouldn't have made.

It seems a bit harsh to root for them to fail though. Failure would mean Peak employees lose their jobs, suppliers and other creditors don't get paid, some skiers who I respect and who's content I enjoy will suffer, and the industry loses a brand that makes skis people seem to enjoy. Why would you be rooting for that?

The crowd funding seems like a desperate measure which is presumably the only avenue available to the company to stay afloat, and if it's really their only way forward, I don't have an issue with it. Investors contributing to that crowd funding will almost certainly take a total loss on their investment, but from what I've been able to read, Peak has disclosed everything they need to for investors to make an informed decision before putting money in. I bet they'll wind up pretty close to their investment goal - there will be enough people who have relationships with the skiers who are the faces of the company who will want to see them succeed and for whom kicking in a few grand is pocket change.

They seem to have made some questionable decisions over the last 2 years, but at this point, they can't put that toothpaste back in the tube. What else are they supposed to do?
 
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Wasatchman

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Definitely get rid of the tracking links :duck:

OK, let's call the 2026/2027 season a reasonable goal post.

I have you down as Peak - downthumb; Sporten/Kastle ? ; Renoun ? ; Original + ?
The links are up so people can see for themselves and make their own decision including reading what this thread is saying.

I am guessing Kastle is struggling and almost certainly losing a lot of money but they have a billionaire owner with deep pockets that can continue to fund them in perpetuity if he wants.

I thought Original+ already went bankrupt. Renoun is also presumably struggling given it is listed for sale. I'm rooting for Renoun as while I don't know the founder Cyrus by all accounts he seems like a good guy and did an impressive job building up the business.
 

cantunamunch

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The links are up so people can see for themselves and make their own decision including reading what this thread is saying.

I am guessing Kastle is struggling and almost certainly losing a lot of money but they have a billionaire owner with deep pockets that can continue to fund them in perpetuity if he wants.

I thought Original+ already went bankrupt. Renoun is also presumably struggling given it is listed for sale. I'm rooting for Renoun as while I don't know the founder Cyrus by all accounts he seems like a good guy and did an impressive job building up the business.

Like I said, let's have a goalpost, say 3 season-years, with firm pick sheets of who you do and don't want to survive to that goal.

3 season years seems long enough for the broader economy and *ahem* political factors to have done their thing.

On a meta level, every consumer purchase that isn't chasing fleeting-deals-of-the-day will be making just such picks.
 
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Wasatchman

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@Wade I am rooting against Peak because I don't like how they went about it. If people are "investing" understanding what they are getting into then that's cool. I just hope they understand. I suspect many may not fully understand.

Personally if I was Davenport I would be looking to disassociate myself and look at other opportunities, but hey ho, maybe I am being too harsh in my judgment.
 
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Wasatchman

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Like I said, let's have a goalpost, say 3 season-years, with firm pick sheets of who you do and don't want to survive to that goal.

3 season years seems long enough for the broader economy and *ahem* political factors to have done their thing.

On a meta level, every consumer purchase that isn't chasing fleeting-deals-of-the-day will be making just such picks.
I generally don't like to root against anyone. I am rooting against Peak because I don't like the way they seem to have gone about things. @Wade has his own differing view and I respect that too.

I am guessing Peak won't survive after this season but let's see. Kastle I think will be around a long time because of their wealthy owner but I think they will continue to struggle. I would guess Renoun doesn't survive 3 years but I hope I'm wrong. Original+ is already bankrupt from what I understand.
 

dovski

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@Wade I am rooting against Peak because I don't like how they went about it. If people are "investing" understanding what they are getting into then that's cool. I just hope they understand. I suspect many may not fully understand.

Personally if I was Davenport I would be looking to disassociate myself and look at other opportunities, but hey ho, maybe I am being too harsh in my judgment.
I think the unfortunate reality is that a lot of folks will read the marketing hype and not the financial details before deciding to invest. Lots of dumb money out there and this crowd sourcing approach definitely takes advantage of that ... as the saying goes " a fool and his money are soon parted".

As for poor financial decisions, I do know that Peak has two Montana Crystal Race machines that they spirited away from Crosson. Even getting them at a discount I am sure they cost a pretty penny and are probably way more than what Peak needed. The corporate cars I am less concerned about, but the overall health of the business, that is the real red flag. Bottom line is that when starting a new company it is always good to bootstrap as much as you can to cut down on costs and preserve cash flow, because when you are just starting out, running out of cash means you go out of business.
 

cantunamunch

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I generally don't like to root against anyone. I am rooting against Peak because I don't like the way they seem to have gone about things. @Wade has his own differing view and I respect that too.

I am guessing Peak won't survive after this season but let's see. Kastle I think will be around a long time because of their wealthy owner but I think they will continue to struggle. I would guess Renoun doesn't survive 3 years but I hope I'm wrong. Original+ is already bankrupt from what I understand.

I understand but I'm not sure my point came across - having a firm idea of whom you like and whom you are meh about between now and 2026 will absolutely inform purchasing decisions in a market with rollercoaster prices and rollercoaster availability.

Cumulatively, that level of consumer self-knowledge has the potential to both over-ride marketing and provide life preservation to strugglers.

By extension of my principle above, Peak are building an "investor" customer-by-another-name base. AKA 'let them buy into a loyalty club'.
 
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Wasatchman

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@cantunamunch my view would be to just buy the skis you like without worrying too much about whether the company will be around in a few years as far as purchasing decision.

Even if the company goes bust you still have a nice pair of skis that you like.

Fair enough if what you're getting at is trying to predict if the skis will be available later at a bargain price.
 

cantunamunch

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@cantunamunch my view would be to just buy the skis you like without worrying too much about whether the company will be around in a few years as far as purchasing decision.

So long as the use cycle is 100 days to throw-away, sure, that works - until your likes disappear and you're picking from an ocean of meh.


Now imagine that same philosophy in the bike market. Will there be replacement custom seat posts/specific bottom brackets/shift features for that frame 3 years from now?
 

DocGKR

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Like Van Deer, if Kastle keeps doing well on the World Cup, it may substantially help the brand moving forward in places that value such success (ie. Europe).
 

Wade

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Lots of dumb money out there and this crowd sourcing approach definitely takes advantage of that ... as the saying goes " a fool and his money are soon parted".
That may be true, but I doubt we're going to see a lot of "dumb money" funneled towards this.

When I think about dumb money, I think about unsophisticated and inexperienced investors putting money into something they don't really understand and getting gamed by larger players. I just can't see that type of money being attracted to this "investment".

I think the money going into this will be "smart money" from smart people who just won't care about the loss they'll take on this because a few thousand dollars doesn't really mean anything to them. I'm thinking about the guy with a place in Aspen who hires Dav for a couple of guided days at Christmas every year, or the Yellowstone club guy who has skied with Bode a few times and bought Peak skis for his family. I think this is where the money is going to come from - from people who want to support and deepen relationships with legendary skiers, and for who putting in $10k that they'll never see again makes absolutely no difference.
 
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Wasatchman

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So long as the use cycle is 100 days to throw-away, sure, that works - until your likes disappear and you're picking from an ocean of meh.


Now imagine that same philosophy in the bike market. Will there be replacement custom seat posts/specific bottom brackets/shift features for that frame 3 years from now?
Fair enough in bike market but with skis replacement part availability is not a factor. I suppose you could worry about warranty availability. But generally for skis I think most can simply not worry about that too much and simply buy what they like.
 

dovski

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That may be true, but I doubt we're going to see a lot of "dumb money" funneled towards this.
When I think about dumb money, I think about unsophisticated and inexperienced investors putting money into something they don't really understand and getting gamed by larger players. I just can't see that type of money being attracted to this "investment".

I think the money going into this will be "smart money" from smart people who just won't care about the loss they'll take on this because a few thousand dollars doesn't really mean anything to them. I'm thinking about the guy with a place in Aspen who hires Dav for a couple of guided days at Christmas every year, or the Yellowstone club guy who has skied with Bode a few times and bought Peak skis for his family. I think this is where the money is going to come from - from people who want to support and deepen relationships with legendary skiers, and for who putting in $10k that they'll never see again makes absolutely no difference.
Well it has been less than 24 hours and they are already almost 25% of the way to their goal with 117 days left. So at least $300K of money has come through so far and I am sure that number will grow over the course of the week. Given the number of investors it is over $2k on average per investor and remember you have to invest at a much higher level to get that 1:1 time needed to deepen that relationship. So yes maybe a couple folks spend to get time with Bode and deepen/develop that relationship, my guess is the majority are not investing at that level, so either way there is still a lot of dumb money going into this.
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