Peloton Interactive, Inc. shares bounced off Thursday’s after-hours trading after CEO John Foley fought media reports claiming production suspensions and layoffs.
Stock prices plummeted 23.9% in a regular session on Thursday, falling below the IPO price for the first time in nearly two years.After Reported by CNBC Production of that exercise equipment will be halted after demand declines.However, after Peloton’s release, stocks surged almost 10% in extended trading sessions. Reserve income When Letter from Foley..
“This week we experienced a leak containing sensitive information and the press was flooded with speculative articles,” Foley wrote in a letter sent to the “Peloton Team” and posted it publicly. “The information obtained by the media is incomplete, out of context and does not reflect Peloton’s strategy.”
“We have identified the leaker and are taking appropriate legal action,” Foley said. Since then, he has tackled two key elements of recent media coverage. Insider reported It was working at the beginning of the week and production stopped.
Foley called the report that Peloton’s exercise bikes and treadmills were completely shut down “wrong”, suggesting that the layoffs were not yet written in stone.
“We are considering all options as part of our efforts to make our business more flexible,” he said of the possibility of layoffs, and the company “reset production levels for sustainable growth.” Said.
Peloton adjusted for second-quarter sales of $ 1.14 billion, guidance ranged from $ 1.1 billion to $ 1.2 billion, and adjusted Ebitda losses of $ 260 million to $ 270 million. It states that it is better than the $ 325 million guidance for after-losses. To $ 350 million.
In the release of earnings information, Foley took important corrective actions to improve the profitability outlook and optimize company-wide costs, as Peloton executives said in their first-quarter earnings. I have included a statement stating.
“This includes improving gross margins, moving to a more variable cost structure, and identifying operating cost reductions associated with building a more focused peloton,” he writes.
The company is still suffering from declining demand for equipment, but Foley emphasized in a letter that customers are still using the equipment and are maintaining content subscriptions. Peloton has long been sold as a rare exercise equipment manufacturer that does not rely entirely on the sale of equipment because it regularly earns money from users enrolled in the exercise class.
“The churn rate for the last quarter was 0.79%, which means our members are sticking to us,” he writes.
Peloton shares bounce and production ceases after CEO disputes reports of massive layoffs
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