Illustration: Aïda Amer/Axios

The mood has shifted and balance sheets and profits seem to matter to equity investors again, as the recent debuts of large, money-losing companies have been punished by the market.

Driving the news: Shares of smart stationary bike company Peloton opened down 7% and closed 11% below their $29 IPO price to mark the third-worst performance for an IPO that raised more than $1 billion since the financial crisis, Bloomberg data showed.

  • This is becoming a pattern.
  • "While most of the 11 other companies that have gone public this month priced within or above their marketed range, the largest of them, SmileDirectClub is trading about 44% below its offer price in its $1.35 billion listing," Bloomberg notes.

Why it matters: As the U.S.-China trade war has intensified, triggering depressed economic data and heightened recession fears globally, investors have gotten more selective about what stocks they want to buy.

  • Market leadership also has shifted from growth stocks to value plays as U.S. Treasury yields have plunged and investors seek out stocks that offer high dividends and have historically been less risky.

Between the lines: Peloton, like Lyft and Uber, is a company that loses more money as it grows.

  • Company filings show Peloton lost $196 million on sales of $915 million during the 12 months ended June 30, after losing $48 million on $435 million in sales the prior year.

What they're saying: “We totally understand the sentiment today,” CFO Jill Woodworth told Bloomberg. “As I’ve seen over the last couple of decades, there’s always been different periods of time when people focus on growth and when people focus on profitability.”

  • “It’s an interesting time in the markets,” CEO John Foley added. “There is anxiety. The markets are on edge.”

What they're not saying: Peloton may also be hurt by its dual-class share structure that gives certain owners, including its CEO, 20 votes for each share they own. Public investors only get 1 vote per share.

  • In addition to being a tough pill for traders to swallow, the dual-class structure means the companies aren't listed in many index funds favored by passive investors, including the S&P 500 index.
  • That's important as assets in U.S. index-based equity mutual funds and ETFs surpassed active stock funds for the first time ever this month.

The bottom line: The unimpressive market performance of Peloton, Lyft, Uber and SmileDirectClub has poured ice cold water on 2019's stock market IPO euphoria.

Go deeper: Peloton CEO John Foley on post-IPO falling stock price

Go deeper

California to independently review FDA-approved coronavirus vaccines

California Gov. Gavin Newsom. Photo: Justin Sullivan/Getty Images

California will "independently review" all coronavirus vaccines approved by the Food and Drug Administration before allowing their distribution, Gov. Gavin Newsom (D) announced at a news conference Monday.

Why it matters: The move that comes days after NAID director Anthony Fauci said he had "strong confidence" in FDA-approved vaccines could cast further public doubt that the federal government could release a vaccine based on political motives, rather than safety and efficacy.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Politics: Trump says if Biden's elected, "he'll listen to the scientists"Trump calls Fauci a "disaster" on campaign call.
  2. Health: Coronavirus hospitalizations are on the rise — 8 states set single-day coronavirus case records last week.
  3. States: Wisconsin judge reimposes capacity limit on indoor venues.
  4. Media: Trump attacks CNN as "dumb b*stards" for continuing to cover pandemic.
  5. Business: Consumer confidence surveys show Americans are getting nervousHow China's economy bounced back from coronavirus.
  6. Sports: We've entered the era of limited fan attendance.
  7. Education: Why education technology can’t save remote learning.
Updated 2 hours ago - Politics & Policy

Microphones will be muted during parts of Thursday's presidential debate

Photos: Jim Watson and Saul Loeb/AFP via Getty Images

The Commission on Presidential Debates adopted new measures on Monday to mute the microphones of President Trump and Joe Biden to allow each candidate two minutes of uninterrupted time per segment during Thursday night's debate.

Why it matters: During September's chaotic debate, Trump interrupted Biden 71 times, while Biden interrupted Trump 22 times.