Why Peloton Shares Are Struggling Today
Shares of fitness equipment maker Peloton Interactive (NASDAQ: PTON) are down 2% as of 12:26 p.m. ET on Monday, having partially recovered from an early dip of a little more than 6%. The setback follows a firm gain on Friday prompted by the announcement of cost-cutting measures and price increases.
Think of it as a case of buyer's remorse, with a bit of marketwide lethargy also playing a role. With a full weekend to think about Friday's news, in addition to rekindled worries that a recession remains a distinct possibility, discretionary stocks like Peloton Interactive remain vulnerable.
On Friday, Peloton announced price increases for its Peloton Bike+ and Tread treadmill in several key markets. In the United States, for perspective, the cost of the Bike+ will be increasing from $1,995 to $2,495, while the Tread's sticker price will grow from $2,395 to $3,495. The price increase follows July's decision to entirely outsource production of its fitness equipment to third-party manufacturers as part of an effort to cull costs. That news immediately preceded a reversal of the stock's downtrend that ultimately unwound more than 90% of its peak value reached in early 2021, during the worst of the COVID-19 pandemic.
Source Fool.com
