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Guess it was all a pandemic silver lining for PelotonINTL

Guess it was all a pandemic silver lining for Peloton

In the unforgiving world of capital markets, things tend to fall as fast as they rise. This reality is certainly ringing true for Peloton (PTON). The home fitness company became a household name last year when exercise enthusiasts, desperately seeking a replacement for their closed down gyms, made the company’s stationary bikes their newest home edition.

Shares of Peloton were bought up as quickly as the bikes, sending the stock price up 450% from the beginning of January to the end of December last year. That’s about when enthusiasm started to fade for the now unprofitable company. After a steep drop of 35% last Friday, the stock is now down more than 60% year to date.

Not only has Peloton struggled to meet demand due to supply chain issues, but subscription revenue is also slowing among existing users. The company isn’t going out without a fight, though, and is hoping to innovate its way through the headwinds. Just last week, Peloton launched a collaboration with Spotify (SPOT) that will allow users to connect with instructors through their playlists.

why it matters

A year to date overlay of Peloton's and Planet Fitness' (PLNT) stock prices is worth a thousand words. Planet Fitness shot up to record highs last week just as Peloton accelerated its downward trajectory. The movements are very telling of investor sentiment around fitness stocks in the face of economic reopenings.