Trading halted in Peloton after production pause report

Peloton’s shares tumbled before trading was halted Thursday, after a report that the fitness firm planned to suspend production of bikes and treadmills due to falling consumer demand. 

Volatile trading struck the company’s shares following a CNBC report, which cited internal documents and said Peloton would pause the making of its Bike product for two months.

The firm had already halted its more expensive Bike+ in December, and will do so until June, while treadmill production is to stop for six weeks from next month, the report said.

Trading in the stock was interrupted four times on New York’s Nasdaq, the last time around 1810 GMT, when the share lost more than 20 percent to about $25.

When trading resumed, shares were down 15 percent.

Peloton did not respond to an AFP request for comment on the CNBC report.

But it did release a statement with a glimpse at its quarterly earnings, which are due to be released in their entirety on February 8.

It said 2.77 million connected fitness subscriptions had been cancelled, compared to the 2.8 million to 2.85 million it had been expecting.

“As we discussed last quarter, we are taking significant corrective actions to improve our profitability outlook and optimize our costs across the company,” said John Foley, co-founder and CEO of Peloton.

The firm has been struggling to cope with waning demand after experiencing considerable growth during the pandemic.

Peloton shares have been under pressure since early November, when the company cut its forecast as more consumers return to gyms amid the reopening economy.  

It also went on the counterattack last month after a plot twist in the “Sex and the City” reboot helped send its shares into a skid — bringing a key character on the show back to life in a parody ad.