Peloton Interactive, Inc. shares crashed more than 24% after CNBC reported internal documents from the company that said production of its bikes and treadmills would be temporarily halted due to souring demand. Shares have been halted and reopened several times and now trade at a significant discount of the $29 IPO price.
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The story for Peloton continues to worsen. In a confidential presentation dated Jan. 10, the company (known for slapping an iPad on a stationary bike and charging thousands of dollars) said demand for its bikes and treadmill had faced a "significant reduction" worldwide.
CNBC explains more about upcoming production halts for its fitness products:
Peloton plans to pause Bike production for two months, from February to March, the documents show. It already halted production of its more expensive Bike+ in December and will do so until June. It won't manufacture its Tread treadmill machine for six weeks, beginning next month. And it doesn't anticipate producing any Tread+ machines in fiscal 2022, according to the documents. Peloton had previously halted Tread+ production after a safety recall last year.
Peloton has completely misjudged demand as it's stuck with thousands of cycles and treadmills sitting in warehouses across the country.
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