Peloton shares plunge 27% after report on production pause By Reuters

(Reuters) – Peloton Interactive (NASDAQ:) Inc is temporarily halting production of its connected fitness bikes and treadmills after a significant drop in demand, CNBC reported on Thursday, citing internal documents from the company.

Shares in the exercise bike maker, which immediately did not respond to a Reuters request for comment, slumped as much as 27% to fall below the IPO price of $29, hitting a near two-year low.

In a confidential presentation dated Jan. 10, Peloton said it had seen a “significant reduction” in demand and that it plans to pause bike production in February and March, according to the CNBC report. It also won’t manufacture the Tread treadmill machine for six weeks, beginning next month.

Once a pandemic darling, Peloton has seen a slump in demand for its fitness classes and equipment as people venture out of their houses to hit gyms again.

In May last year, the company was forced to recall its treadmills following reports of multiple injuries and the death of a child in an accident. U.S. regulators are investigating the company over the injuries.

Peloton in November slashed its full-year outlook by up to $1 billion with analysts warning about a tough path ahead.

The company is not looking to produce any Tread+ machines in fiscal 2022 and has thousands of cycles and treadmills lying in warehouses or on cargo ships, the CNBC report added.

Peloton was also the subject of a “Sex and the City” episode last month that suggested the company’s exercise bikes could be lethal. It later responded with a parody ad of its own.