Peloton shares cratered 30 percent on Wednesday to an all-time low, with the company warning of a negative cash flow in the next two quarters. Peloton stock has dropped 95 percent from its high during the coronavirus pandemic.
The fitness-bike maker also reported a drop in paying subscribers, adding that the costs of an equipment recall have decreased its profit, according to a report by the Wall Street Journal.
Woman on Peloton bike (Peloton)
Peloton CEO John Foley ( Kimberly White /Getty)
Shares dropped below $5 in early Wednesday trading, plunging to the lowest trading levels since Peloton went public in 2019. The stock has also dropped 38 percent in the past 12 months, and more than 95 percent from its “pandemic-fueled high” in early 2021, the report added.
Peloton previously told investors it would try to generate cash flow from its operations after it cut jobs and restructured its business. The company also reported a negative cash flow of $74 million in the latest quarter, citing a legal settlement.
“We don’t currently expect to remain free cash flow positive in the two upcoming quarters,” the company said.
At the same time, the company also noted that the cost of a recent seat-post recall was higher than expected, and would continue to weigh on its results. So far, Peloton has received roughly 750,000 requests for replacement seat posts, and has only been able to fulfill 340,000 of them.
As Breitbart News previously reported, Peloton has faced a number of crises over the past year, including its plan to conceal the internal corrosion of exercise machines — referred to internally as “Project Tinman” — being made public.
One outraged employee who came forward said: “It was the single driving factor in my beginning stages of hatred for the company that I had spent the previous year and a half falling in love with.”
You can follow Alana Mastrangelo on Facebook and Twitter at @ARmastrangelo, and on Instagram.
