Few companies represent the pandemic era more than Peloton Interactive Inc. The fitness company's stationary bike connects users virtually with other riders and instructors, making it a must-have accessory during the Covid-19 lockdowns. Peloton shares surged from about $20 in early 2020 to almost $170 in January 2021. But then the development of Covid-19 vaccines and therapeutics allowed consumers to leave their homes again. Peloton was slow to adapt, and its revenue suffered. Its shares have fallen 90% since peaking, dropping to a low of about $12 earlier this month.
Is Peloton an irreparably broken company, or can it be fixed and once again thrive? Its main product, which costs in excess of $1,000, represents a major investment for consumers at a time when spending habits are shifting out of pandemic mode. For example, airline companies have forecasted a record summer travel seasons as people leave their homes to get out and about again. Gym operators are also doing better, with Planet Fitness Inc. reporting 16.2 million members spread across 2,291 stores as of the end of the first quarter, up from 14.1 million members and 2,146 stores a year earlier. Bloomberg Opinion columnists offer some thoughts on how the New York-based company might turn itself around.
Leverage Its Powerful Subscription Model: Justin Fox
Peloton is now a company in crisis, with net income of negative $757 million in the quarter ending March 31 and a stock price down more than 90% from its 2021 peak. It’s also a company with a lucrative subscription business that just keeps signing up more customers.