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Peloton Stock Craters Following Report of Production Halt, Waning Fitness Demand

Peloton shares hit a two-year low Thursday after CNBC reported the group will temporarily pause production of its connected fitness equipment amid a "significant" slump in consumer demand.

Updated at 3:45 pm EST

Peloton  (PTON) - Get Peloton Interactive, Inc. Class A Report shares collapsed Thursday, pegging the fitness equipment maker at the lowest levels in more than two years, following a report that it's planning to halt production for several weeks as it seeks to slash costs amid waning customer demand.

CNBC said the group is planning a two-month pause in overall equipment production, citing an internal memo dated January 10, citing a "significant reduction" in post-pandemic demand for its connected bikes and treadmills.

Peloton, along 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.

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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 -- as well as costs linked to its treadmill recall -- would squeeze profit margins for the remainder of its fiscal year.

Peloton shares were marked 24.6% lower in late-afternoon trading Thursday, following several halts by Nasdaq officials for extreme volatility, to change hands at $23.95 each. The stock hit a two-year low of $23.25 earlier in the session.

Last week, Nasdaq officials said they will remove Peloton shares from its Nasdaq 100, the Nasdaq Equal Weight Index and Nasdaq ex-Technology Index benchmarks following a year in which the stock lost more than 70% of its value. 

The changes are set to take place on January 24. Peloton will publish its December quarter earnings on February 8.