Peloton (PTON) Stock Crashes 25% on Report It Is Halting Production Amid 'Significant Reduction' in Demand

January 20, 2022 1:11 PM EST

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Shares of Peloton (NASDAQ: PTON) are down 25% in today’s trading session after CNBC reported the fitness company is “temporarily halting production of its connected fitness products” in a response to weaker-than-expected demand.

Peloton is now more focused on cutting costs than on ramping up manufacturing. The report notes that Peloton has decided to pause Bike production for two months until the end of March.

This is the second cost-cutting move after Peloton halted production of more expensive Bike+ in December. Peloton also won’t produce its Tread treadmill machine for six weeks and it doesn’t anticipate producing any Tread+ machines in fiscal 2022.

CNBC is citing an internal presentation document that mentions “significant reduction” in demand as well as shows that the company's outlook presented on October 31 was too high when it comes to demand and deliveries in its fiscal third quarter and fourth quarter.

Peloton stock price is down about 24% to push its market cap below $8 billion.

By Senad Karaahmetovic | [email protected]

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Senad Karaahmetovic