In this photo illustration, the Peloton Interactive logo is shown on a smartphone screen.
Rafael Henrique | Light Rocket | Getty Images
Shares of Peloton Interactive tumbled to an all-time low on Friday as investors lost hope the connected fitness equipment maker could turn itself around and turn a profit, even under a new CEO.
The stock fell more than 13% after the market opened, amid widespread selling, touching an all-time low of $14.70. That’s also well below Peloton’s IPO price of $29.
Peloton is due to announce its quarterly results, now with CEO Barry McCarthy at the helm, on Tuesday morning.
Its market capitalization has fallen from about $50 billion early last year to less than $5 billion.
On Thursday evening, the Wall Street Journal reported that Peloton is targeting potential investors, including industry players and private equity firms, for a 15% to 20% stake in its business. The newspaper said that the new capital could help Peloton in its attempt to turn, but there is no guarantee that such a deal will succeed.
A Peloton spokesman declined to comment.
“While it might be a good idea to get a vote of confidence … we don’t see that as very encouraging for those who own the shares,” Gordon Haskett analyst Don Bilson said, referring to the Journal report. “Movements like this are rarely made from positions of strength. Despair is more like her.”
Activist Blackwells Capital has ramped up pressure on Peloton to sell itself, recently asserting that the changes put in place so far under McCarthy are not enough. Blackwells argued that the better owner might be Amazon or Netflix.
In an effort to win over new customers and make more money from existing customers, Peloton recently slashed the prices of its Bike, Bike+ and Tread machines, while planning to raise its monthly subscription fee entirely next month.
Simeon Siegel, an analyst at BMO Capital Markets, said turmoil had been the “only real constant” in Peloton in recent months.
“From its initial success to its ongoing strategic testing, the company has yet to find a sense of return to normal that can mitigate recurring volatility,” he said.
Peloton shares are down more than 52% so far this year.