The bad news flywheel continues to be spinning in warp speed at Peloton (PTON).
Shares of Peloton crashed 24% to $24.22 on Thursday after a CNBC report that the struggling fitness company would temporarily halt production of its bikes and treadmills due to sluggish consumer demand. Shares fell below the company’s September 2019 IPO price of $29.
The company will reportedly stop producing its bikes for two months and treadmills for six weeks.
A Peloton spokeswoman didn’t return Yahoo Finance’s request for comment.
“Peloton’s inventory build at the end of last quarter made it clear that they were still operating a supply demand mismatch. Unfortunately, unlike the pandemic, this time supply meaningfully outpaced demand,” BMO Capital Markets analyst Simeon Siegel told Yahoo Finance.
Siegel has been a long-time bear on Peloton with an Underperform rating on its stock.
Shares are now down 30% in December amid bad headlines from a product placement in the new “Sex and the City” reboot. One of the show’s lead characters, Mr. Big, suffers a heart attack after a Peloton bike ride at the end of its premiere episode.
Earlier, Peloton’s stock crashed more than 30% on Nov. 5 after the company said that connected fitness subscribers of 2.49 million was roughly in-line with analyst estimates. The number of workouts on the platform trended lower for the second consecutive quarter. Sales fell well short of analyst estimates, and the company posted a wider loss than expected.
Peloton also slashed its full-fiscal year outlook.
The company sees full-year sales of $4.4 billion to $4.8 billion, down sharply from $5.4 billion previously. Peloton expected a full-year adjusted operating loss of $425 million to $475 million. The company had expected an operating loss of $325 million.
Shares are down 83% in the past year.
More bad news could be right around the corner: Peloton’s earnings release on Feb. 8.
“We expect that guidance, if given, will be kitchen-sinked at this point and await more color on these various news items on the call,” Macquarie analyst Paul Golding said. Golding rates Peloton at outperform with an $85 price target, which assumes 254% upside from current price levels.