Business Brief

Peloton CEO denies report it’s halting production after stock plunged 25%

By ,

Peloton’s CEO has denied a report the troubled company plans to halt production on its Bikes and Treads to cut costs, adding that the company has identified the “leaker” and is taking legal action.

The CNBC scoop published Thursday cited internal documents obtained by the network. The news sent Peloton’s stock spinning out of control Thursday afternoon. It plunged 25% and even triggered a trading halt.

By end of day Thursday, the stock had completed the erasure of all of its 2020 pandemic gains before slightly rebounding Friday, up 12% on the CEO’s denials.

It capped off a disastrous downhill week for the company that included reports of staff layoffs, losing its spot on the Nasdaq-100 index, hiking prices on Bikes and Treads, and news that executives and insiders sold nearly $500 million in stock before its descent.

To think, the fictional death of beloved Sex and the City character Mr. Big post-Peloton ride was just last month.

In an effort to turn things around, the company brought on consulting firm McKinsey & Co. to “review its cost structure and potentially eliminate some jobs,” according to a separate CNBC report.

“In the past, we’ve said layoffs would be the absolute last lever we would ever hope to pull. However, we now need to evaluate our organization structure and size of our team,” Peloton CEO John Foley wrote in a letter to Peloton staff posted to the corporate website.

Despite all the bad press, the company’s preliminary second quarter earnings results are close to target. The company will report earnings after the stock market closes on Tuesday, February 8.

SIMONE DEL ROSARIO: FULL DISCLOSURE: I’M A PROUD PELOTON OWNER, BUT I’M ALSO PRETTY HAPPY I DON’T OWN THE  STOCK.

IS THERE A DOWNHILL SETTING ON THIS THING? BECAUSE THAT’S WHERE THE COMPANY’S BEEN GOING ALL YEAR LONG. AND WE’RE ONLY THREE WEEKS IN.

I MEAN – THE MISTER BIG DEBACLE WAS ONLY A MONTH AGO. LET’S DO A SEASON RECAP ON WHAT’S HAPPENED TO THIS TRAGICALLY UNDERPERFORMING COMPANY SINCE.

YOU MAY NOT BE ABLE TO CRASH A STATIONARY BIKE, BUT PELOTON’S STOCK CRASHED SO HARD ON THURSDAY THEY HAD TO HALT TRADING. BY THE END OF THE DAY THE STOCK WAS DOWN NEARLY 25%.

THE CRASH COINCIDES WITH THIS SCOOP FROM CNBC THAT THINGS ARE SO BAD AT THE COMPANY THEY’RE HALTING PRODUCTION OF BIKES AND TREADS. THE NETWORK CITES INTERNAL DOCS THEY OBTAINED.

BUT WAIT! PELOTON’S C-E-O SAYS THE RUMORS ARE FALSE! TOO LATE TO SAVE THAT STOCK PRICE.

IN A LETTER SENT TO THE PELOTON TEAM JOHN FOLEY WROTE: I WANT ALL OF YOU TO KNOW THAT WE HAVE IDENTIFIED A LEAKER, AND WE ARE MOVING FORWARD WITH THE APPROPRIATE LEGAL ACTION.

OTHER BUMPS IN THE ROAD THIS WEEK INCLUDE LOSING ITS SPOT ON THE NASDAQ 100, REPORTS OF STAFF LAYOFFS, NEWS THEY’RE HIKING THE PRICE ON BIKES AND TREADS, AND REPORTS EXECS AND INSIDERS SOLD NEARLY HALF A BILLION IN STOCK BEFORE ITS DESCENT.

QUITE THE BANNER WEEK, YES ONE WEEK.

THIS COMPANY’S BEEN A ROLLER COASTER. THE PANDEMIC DARLING HAS SEEN ALL OF ITS 2020 GAINS ERASED.

BUT EVER THE OPTIMIST – ITS CEO POINTS OUT SUBSCRIBERS ARE STILL CLIMBING! AND THEY’VE BROUGHT ON CONSULTING FIRM MCKINSEY TO TRY TO TURN THE REST AROUND.

I’LL END WITH A LITTLE SATIRE FROM TWITTER TITAN AND FINANCIAL ADVISOR DOUGLAS BONEPARTH, WHEN HE TWEETED: IRONICALLY, IT WAS PELOTON INVESTORS THAT WERE TAKEN FOR A RIDE.

I’M SIMONE DEL ROSARIO AND FROM MY HOME PELOTON STUDIO IN NEW YORK, IT’S JUST BUSINESS.

Comments are still pending approval. Rate this story to add your own thoughts below.

Comments are still pending approval. Rate this story to add your own thoughts below.

Comments are still pending approval. Rate this story to add your own thoughts below.

Comments are still pending approval. Rate this story to add your own thoughts below.

Get ready to rate in…

lock

Watch the video to unlock rating

Your Rating

Rating closes in 4 days

Total User Rating

eye icon

Rate to reveal

Community ratings are revealed after you rate the story.

comment bubbles

Peloton’s CEO has denied a report the troubled company plans to halt production on its Bikes and Treads to cut costs, adding that the company has identified the “leaker” and is taking legal action.

The CNBC scoop published Thursday cited internal documents obtained by the network. The news sent Peloton’s stock spinning out of control Thursday afternoon. It plunged 25% and even triggered a trading halt.

By end of day Thursday, the stock had completed the erasure of all of its 2020 pandemic gains before slightly rebounding Friday, up 12% on the CEO’s denials.

It capped off a disastrous downhill week for the company that included reports of staff layoffs, losing its spot on the Nasdaq-100 index, hiking prices on Bikes and Treads, and news that executives and insiders sold nearly $500 million in stock before its descent.

To think, the fictional death of beloved Sex and the City character Mr. Big post-Peloton ride was just last month.

In an effort to turn things around, the company brought on consulting firm McKinsey & Co. to “review its cost structure and potentially eliminate some jobs,” according to a separate CNBC report.

“In the past, we’ve said layoffs would be the absolute last lever we would ever hope to pull. However, we now need to evaluate our organization structure and size of our team,” Peloton CEO John Foley wrote in a letter to Peloton staff posted to the corporate website.

Despite all the bad press, the company’s preliminary second quarter earnings results are close to target. The company will report earnings after the stock market closes on Tuesday, February 8.

Get ready to rate in…

Community Rating

Community ratings are revealed after you rate the story.

lock

Watch the video to unlock rating

Rate the bias

Keep us honest! Let us know if you thought this video was neutral or biased.

Comments are still pending approval. Rate this story to add your own thoughts below.