Peloton Will Reportedly Halt Production Of Fitness Products, Shares Plunge Nearly 20%
The news caused Peloton shares to plunge as much as 24%—with trading temporarily halted—before the stock pared back losses somewhat, down 18% as of 1:30 p.m. EST.
The company will halt Bike production for two months—from February to March—and will also suspend production of its treadmills for six weeks starting in February, according to internal documents reviewed by CNBC. The company reportedly said that demand for its at-home fitness equipment has seen a “significant reduction” around the world, with Peloton evidently having underestimated how many people would still be buying its products after pandemic lockdowns ended.
The at-home fitness equipment maker now reportedly has a large inventory—with thousands of Bikes and treadmills—that it is struggling to offload.With its stock tanking on Thursday, Peloton now has a market capitalization of around $8 billion. That’s down from a peak of $50 billion in January 2021. Peloton was once considered a pandemic-era stock market darling amid high demand from customers stuck at home during lockdowns—and shares skyrocketed roughly 440% in 2020.
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