Updated at 12:30 pm EST
Peloton (PTON) – Get Peloton Interactive, Inc. Class A Report shares slumped lower Friday, extending their six-month decline past 72%, after Nasdaq officials planned to remove the fitness equipment maker from its benchmark tech indices.
The Nasdaq said shipping operator Old Dominion Freight Line (ODFL) – Get Old Dominion Freight Line, Inc. Report will replace Peloton for the start of trading on January 24, a move that could trigger even more selling from investors that track indices such as the Nasdaq 100, the Nasdaq Equal Weight Index and the Nasdaq ex-Technology Index.
Peloton shares were marked 4.6% lower in mid-day trading Friday to change hands at $30.67 each, the lowest since the peak of the market decline in May of 2020.
Peloton, as well as other so-called ‘stay-at-home’ stocks, has struggled to hold investor confidence as pandemic-triggered surges in orders and sales faded amid easing restrictions on indoor gatherings and a return to office work.
Investors were also caught off-guard when the fitness equipment-maker unveiled plans to sell $1 billion worth of shares in mid-November – less than two weeks after saying it had not plans to raise new capital.
The move follows a $9.2 billion wipeout in Peloton shares following weaker-than-expected third quarter earnings published on November 5.
Peloton posted a net loss of $376 million for its fiscal first quarter, which ended in September, amid the slowest sales growth in more than a year and said 2022 revenues would likely come in between $4.4 billion and $4.8 billion, a $1 billion reduction from its prior forecast.
Adding to its demand woes, Peloton said the $400 price cut to its signature bike, rising freight costs and supply chain disruptions — alongside costs linked to its treadmill recall — would squeeze profit margins for the remainder of its fiscal year.