Know The Difference Minute

A huge crisis for one of the stars of the pandemic era.

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Welcome to the Know the Difference Minute

Rewind to the darkest days of the pandemic. When gyms closed, sales of Peloton bikes exploded. The stock price climbed past $160. At one point, its market cap was around $50 billion.

Fast forward to today. Share price in the 30’s. Market cap around $10 billion. 2800 job cuts. A $400 million production facility under construction in Ohio is on hold. And the CEO is being replaced.

What happened? It’s simple. Peloton overestimated demand. Then, restrictions lifted, and gyms filled back up. The company lowered forecasts and –at least for a couple days—it looked like Amazon or Nike might buy the company.

Product sales are important, but Peloton relies on subscriptions for content and classes. Both are suffering. This has created a huge crisis for one of the stars of the pandemic era.

I’m Deanne Phillips from Annex Wealth Management. That is your Know the Difference Minute.