Shares of Peloton — which surged during the pandemic as homebound consumers looked for ways to stay healthy — plummeted more than 20% on Thursday after reports the company was temporarily halting production of its at-home fitness products will see a “significant reduction” in consumer demand as it seeks to cut costs.
Peloton will temporarily halt manufacturing of home fitness products, including its bikes and treadmills, CNBC first reported Thursday.
The news caused Peloton shares to plunge as much as 24% — with trading temporarily halted — before the stock pared losses somewhat, plummeting 22% as of 3:00 p.m. EST.
According to internal documents reviewed by CNBC, the company will halt bicycle production for two months — from February to March — and halt production of its treadmills for six weeks beginning in February.
The company reportedly said demand for its home fitness equipment had “decreased significantly” worldwide, with Peloton apparently underestimating how many people would continue to buy its products after the pandemic lockdown ended.
The home fitness equipment maker reportedly now has a large inventory — containing thousands of bikes and treadmills — that it’s having a hard time getting rid of.
Peloton did not respond immediately forbes‘ Requests for comment.