Peloton (NASDAQ:PTON) shares closed Wednesday down nearly 15%, wiping $4.1 billion off its market value in one day, after the fitness equipment maker apologized for not voluntarily recalling both its treadmill machines over safety concerns sooner.
Since mid-March, Peloton’s market cap has shed $7.4 billion. That was the day Peloton CEO John Foley revealed that an accident involving a Peloton treadmill had resulted in a child’s death.
The company has since been in back-and-forth discussions with the U.S. Consumer Product Safety Commission regarding dozens of reported injuries tied to its machines.
Peloton’s stock was a huge winner in 2020, with shares surging more than 400% for the year. Peloton’s market valued peaked in mid-January at $49 billion. Investors rallied behind
Peloton as it saw tremendous growth during the early days of the COVID pandemic.
Those shares fought their way higher by 33 cents Thursday morning to $82.95.
Consumers were looking for ways to exercise at home while gyms were shut down, and Peloton quickly became the option of choice for those who could afford its high-end cycles and treadmills. Peloton’s 2020 revenue surged to $1.8 billion, from $915 million a year earlier.
But this year, the stock is down 45% so far this year. Some of the decline has come as investors no longer favor companies that benefited from stay-at-home trends. Stocks such as Zoom (NASDAQ:ZM) and Netflix (NASDAQ:NFLX) have started to fade as well. However, Peloton’s decline is deeper due to the treadmill debacle.
