Peloton shares hit record low as pressure builds ahead of earnings report

In this photo illustration, the Peloton Interactive logo is visible on a smartphone screen.

Rafael Enrique | Light rocket | Getty Images

Shares of Peloton Interactive tumbled to a record low on Friday as investors lost hope that the connected fitness equipment maker could turn around and turn a profit even with a new CEO.

Shares fell more than 12% after the market opened amid a broader sell-off, hitting an all-time low of $14.70. It’s also well below Peloton’s $29 IPO price.

Peloton is set to release its quarterly results on Tuesday morning, led by CEO Barry McCarthy.

Its market capitalization has fallen from about $50 billion at the beginning of last year to less than $5 billion.

Thursday night The Wall Street Journal reported that Peloton is targeting potential investors, including industry players and private equity firms to get a 15% to 20% stake in his business. The new capital could help Peloton try to turn things around, but there is no guarantee that such a deal will be successful, writes the Journal.

A Peloton spokesperson declined to comment.

“While it would be nice to get a vote of confidence … we don’t think it’s too encouraging for those who own the stock,” Gordon Haskett analyst Don Bilson said of the Journal report. “Such movements are rarely made from a position of strength. More like desperation.”

Activist firm Blackwells Capital is stepping up pressure on Peloton to sell itself, recently arguing that the changes introduced so far under McCarthy are not enough. Blackwells says the best owner could be Amazon or Netflix.

In an effort to attract new customers and make more money from existing ones, Peloton recently slashed the prices of its Bike, Bike+ and Tread machines, and plans to raise the monthly subscription fee for full access next month.

BMO Capital Markets analyst Simeon Siegel said turbulence has been “the one true constant” at Peloton in recent months.

“From initial success to ongoing strategic testing, the company has yet to find a sense of normality that could smooth out the recurring volatility,” he said.

Peloton shares are down over 52% this year.

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