Peloton Shares Plunge After $757M Lost in Q1

MAY 10 2022·Updated OCT 12 2022

Story

Image credit: Michael Loccisano/Getty Images [via The Wall Street Journal]

The Facts

Shares of in-home exercise equipment maker Peloton Interactive Inc. dropped dramatically after the company released disappointing sales numbers for the first quarter of 2022.
Forbes
The earnings call was the first under new CEO Barry McCarthy, who took over in Feb. in an effort to turn around the company's fortunes amidst supply chain issues and waning demand for its connected bikes and subscription workout plans.
nytimes
McCarthy revealed that the company lost $757M in the first quarter - far more than analysts had forecast - through a combination of write-downs on merchandise and lower revenue on sales and subscriptions.
The New York Times
This has left Peloton "thinly capitalized" according to McCarthy, who also announced a commitment letter for a new loan package from investment banks JP Morgan Chase and Goldman Sachs.
The New York Times
The company's stock is down 64% percent in 2022 alone, and off 90% from its pandemic highs, when consumers rushing to buy its bikes and investors anticipating continued growth sent the stock soaring.
Forbes

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

The pandemic bubble has officially burst, and Peloton has joined the ranks of Zoom, Netflix, and all of the other stay-at-home plays that thrived during the lockdown. All were bid up during the lockdown and all were bound to bust with the reopening.

The New York Times

Narrative B

Peloton is in the early stages of a radical transformation from a "bike company" with its early focus on hardware and devices to a "connected fitness" platform with 100M global subscribers, and McCarthy is just the guy to lead it. Turnarounds are hard work, but the company will bounce back.