09 Nov 2021
Peloton stock crashes, wiping out nearly US$9bn from market value
BY Tom Walker
Shares in Peloton have continued to slide after the at-home fitness giant slashed its annual sales forecast last week.
Peloton's share price has plummeted by more than a third – from US$86 down to US$51 – in less than a week, after it revealed it had experienced a "softer than anticipated start" to its latest financial quarter (Q2/2022) which had led it to "recalibrate its fiscal year outlook".
Announcing its Q1 2022 results, Peloton said the changing market conditions were coupled with an increase in its costs. Some of these were due to the acquisition of commercial equipment manufacturer Precor earlier this year.
"Operating expense grew 140 per cent year-over-year to US$622m, reflecting a significant increase in marketing spend when compared with depressed year-ago levels, continued investments in headcount and systems, growing research and development expense, and the impact from adding Precor’s cost structure," Peloton said.
As a result, Peloton's net loss for the period was US$376m.
At the start of 2021, Peloton's market value stood at around US$45bn, but the past week – and a gradual fall in the share price during the year – has cut that down to around US$15.5bn.
Peloton's share price peaked at US$162 during December 2020.
Earlier this year, the company lowered the price of its original Peloton Bike across all markets to US$1,495 (€1,495, £1,350 GBP). It also introduced a longer, 43-month, 0 per cent financing term option for Bike+ and Tread across all regions.
The latest share price fall follows on from another significant dip in its value in August 2021, when the company revealed Q4 (2021) losses.
At the time, Peloton said that "tactical changes" to the business will hit profits until 2023.
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