Shares of Peloton Interactive
PTON,
were sinking Thursday afternoon, trading below where it first listed, after a report said the exercise-equipment maker was temporarily pausing production of its fitness products, including its popular bike and treadmill because of slumping demand.
Citing confidential internal documents, CNBC reports that the company is reducing its forecast for demand and cutting production, as it aims to control costs.
Shares of Peloton were down sharply on Thursday and has been halted twice during the session so far, following the report. The company made its debut on the Nasdaq Inc.
NDAQ,
as a public company at $29, which was at the top of the expected range of $26 to $29, back in September of 2019, before the coronavirus crisis took hold in earnest.
The stock has now lost more than 70% over the past three months, and has plunged 84% since closing at its post-pandemic peak of $167.42 on Jan. 13, 2021. The company had gotten a boost from COVID, as lockdowns to limit the spread of the deadly virus took hold in the spring of 2020, and consumers purchase equipment for at-home gyms.
Peloton is set to report its quarterly results on Feb. 8.
The company is known for its exercise Bike, Bike + and Tread equipment, which works in conjunction with its subscription service.
The CNBC report comes as Peloton executives have recently said it is adding $250 and $350 in delivery and set-up costs to its original Bike and Tread, respectively. Peloton pegged the price increases to supply-chain costs.
Source: https://www.marketwatch.com/story/pelotons-stock-plunges-20-following-report-it-will-pause-production-of-bikes-treadmills-11642702222?siteid=yhoof2&yptr=yahoo