Peloton Shares Fall After Major Outage Temporarily Hits Bikes And Treadmills

2022-05-14 14:40:54 By : Ms. Judy Zhang

Shares of Peloton, which have largely struggled so far in 2021, took another hit on Tuesday after a major outage which affected the at-home fitness company’s bikes and treadmills, meaning that members were unable to take workout classes—though the issue was resolved by early afternoon.

The outage lasted just over an hour before getting resolved, but shares fell on the news.

Peloton’s stock fell up to 4% on Tuesday amid news of the outage, with shares of the at-home fitness company now down nearly 20% so far this year.

Just before 11:00 a.m. EST, the company said it was investigating an “issue with Peloton services” impacting users’ ability to take classes or access online services through the app.

The cause of the outage, which affected both Peloton’s Bikes and treadmills, wasn’t immediately clear—with the company still investigating and yet to offer an explanation.

Roughly an hour later, Peloton apologized for the inconvenience and said that there was “widespread recovery of Peloton services,” though the company is still working to confirm everything is fully back up and running.

The latest outage is more bad news for the at-home fitness company, which has struggled with waning demand and slowing sales since last year, when shares fell over 70% in 2021. 

The stock rebounded somewhat earlier this month however, first amid reports of a possible acquisition from the likes of Amazon, Nike and Apple, and then after the appointment of veteran tech executive Barry McCarthy as Peloton’s new CEO.

Workplace messaging app Slack also experienced an outage on Tuesday morning, which apparently lasted for several hours. The company posted at noon that there were “signs of improvement” and that it would shortly confirm once the situation was fully resolved. Shares of Slack’s parent-company, Salesforce, fell 0.8% on the news.

Shares of Peloton surged nearly 40% in one week earlier in February, amid reports that the at-home fitness company was drawing interest from potential buyers including Amazon, Nike and Apple, among others. Also helping boost the stock higher—despite Peloton’s lackluster quarterly earnings report—was the appointment of McCarthy, former CFO of Spotify and Netflix, as Peloton’s new CEO on February 8. Last week, McCarthy dismissed the possibility of a sale, saying in an interview that he took the top job to seize a long-term growth opportunity. He plans to turn the company around by doubling down on content, expanding globally and increasing Peloton’s product portfolio. 

Peloton Shares Fall After New CEO Says Company Won’t Be Sold In The ‘Foreseeable Future’ (Forbes)

Can Peloton Be Saved? Here’s What Experts Say About The New CEO, Barry McCarthy (Forbes)

Apple, Amazon Or Nike? Peloton Stock Surges, But Here’s What Experts Say About A Takeover (Forbes)

Pandemic Darling No More: Peloton’s Dramatic Crash In 4 Charts (Forbes)