Peloton was on top of the world at the height of the pandemic. Its stock reached $171 per share, and its market capitalization was around $50 billion.
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It is now laying off 20% of its workforce, replacing its CEO, and reportedly considering a sale to Amazon, Apple, or Nike. Peloton’s stock has occasionally fallen below its IPO price of $29 per share.
CNBC reported on January 20 that the company was temporarily halting bike production. Shares of the exercise bike manufacturer, which was once a pandemic favourite, fell 24 % to around $24, wiping out nearly $2.5 billion in market value.
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According to CNBC, Peloton does not intend to produce any Tread+ machines in fiscal 2022 and has thousands of cycles and treadmills lying in warehouses or on cargo ships unused due to a slump in demand for its fitness classes and equipment as people started to visit gyms again.
According to Insider’s Emma Cosgrove, the company fell victim to the “bullwhip effect,” spending heavily on logistics while expecting high demand — when demand cooled, Peloton was left with costly supply chain operations that now require a major overhaul.
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