Peloton Interactive (NASDAQ: PTON) saw a decline in its stock prices after an activist investor asked the company to fire its CEO as he thinks that he isn’t worthy enough to lead the company. The PTON stock dropped by 0.97% and traded at $26.798 ( down by 0.262 points) at 12:04 p.m. ET. The market capitalization stood at $8.8 billion then. However, the share volume traded for the PTON stock was 30,603,320, much higher than the average share volume of 22,271,936.
Last week’s performance
Earlier last week, Peloton halted the production of its bikes and treadmills after which the stock dropped around 20%. The company announced stopping the production of the fitness equipment for the time being.
The stock had constantly been sliding but towards the closing on Thursday sunk to $26.35 after the news broke. The Peloton Interactive stock (PTON) traded at $26.41, down 5.93 points (-18.62%) on January 20, 2022, at 1:18 p.m. ET.
The PTON stock was up substantially in pre-market trading session last week on Friday. The stock was up by 4.42% and was priced at $25.29 at 8:58 a.m ET today. The market capitalization stood at $7.99 billion. Last Thursday, the stock closed at $24.22, down by a huge 23.93% (losing 7.62 points).
Reason for the halt
With falling demand for fitness products, Peloton announced that it is stopping the production of the products to control the costs yesterday. Peloton Interactive is looking to announce its second-quarter results on February 8 after the market closes.
Peloton’s plan includes pausing the Bike production for two months manufacturing no bikes in February and March. In December, the company had already stopped the production of its more expensive Bike+ and would not resume it until June this year.
During the six weeks starting February, Peloton Interactive would not manufacture any treadmill machine and does not intend to produce the Tread+ in this fiscal year. Peloton Interactive had halted the production of Tread+ after a safety recall last year.
The company is struggling with a significant reduction in the demand for fitness products worldwide. Shoppers are more price-sensitive, and the competitors’ activities have also amplified recently.
The initial guesses made by the company about the number of people buying its products turned out wrong. The demands were mostly pulled forward during the Covid-19 pandemic. Now, the company is left with thousands of cycles and treadmills in its warehouses or on Cargos, requiring a reset in its inventories.
