Shares in Peloton, the connected fitness firm, have fallen by more than 20% on a report the company is to cease production of its treadmills and bikes because of plunging demand.
Trading in the Nasdaq-listed stock was temporarily halted after Sky’s sister news provider CNBC published details of the company’s apparent decision which, it said, were contained in a confidential internal presentation it had obtained.
CNBC said the document, dated 10 January, showed that demand for Peloton’s equipment had suffered a “significant reduction” globally due to price sensitivity among customers.
It also blamed amplified competitor activity and said a short cessation of treadmill and exercise bikes, for two months during February and March, would help control costs.
Peloton had been among the early winners of the COVID pandemic – with demand for its products surging as big advertising campaigns offered connected fitness sessions from the comfort of a subscriber’s home during lockdowns to safeguard public health.
However, a gradual return to normal life – with gyms reopening – meant Peloton had been left with thousands of cycles and treadmills sitting in warehouses or on cargo ships, CNBC reported.
Its market value hit a high of almost $50bn a year ago but over $40bn of that has been lost since, when Thursday’s falls are included.
The company was yet to comment on the report.
Its troubles have coincided with the wider Nasdaq index falling into so-called ‘correction territory’ on Wednesday night – meaning it had closed 10% below its 22 November record high.
Peloton is due to reveal its next set of financial results on 8 February.