Peloton shares fall 20% after report of temporary shutdown | business news

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Shares of Peloton, the affiliated fitness company, fell more than 20% after reports that the company is to halt production of its treadmills and bikes due to falling demand.

Trading in the Nasdaq-listed shares was temporarily halted after Sky’s sister news provider CNBC released details of the company’s apparent decision, which Sky said were contained in a confidential internal presentation it received.

CNBC said the Jan. 10 document shows demand for Peloton gear has “decreased significantly” due to price sensitivity among customers worldwide.

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Treadmill production will be temporarily halted under CNBC’s plans. Image: Peloton

It also blamed increased competitor activity, saying a brief shutdown of treadmills and stationary bikes for two months in February and March would help control costs.

Peloton was among the early winners of the COVID pandemic — with demand for its products soaring as major advertising campaigns offered connected fitness sessions from the comfort of a subscriber’s home during lockdown to protect public health.

However, a gradual return to normal life — with gyms reopening — meant Peloton had been left in warehouses or on cargo ships with thousands of bikes and treadmills, CNBC reported.

Its market value peaked at nearly $50 billion a year ago, but has since lost over $40 billion if you factor in Thursday’s falls.

The company has not yet commented on the report.

Its troubles coincided with the broader Nasdaq index fall into the so-called “correction area”. on Wednesday night – meaning it had closed 10% below its record high set on Nov. 22.

Peloton will release its next financial results on February 8th.



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