The Peloton stock woes only deepened towards the end of 2021, and it hasn’t done much better in 2022. In a devastating turn of events, the company’s market capitalization has fallen so far down that it’s leaving the Nasdaq 100 index.
The Nasdaq 100 is a stock market index comprised of 101 equity securities issued by 100 of the largest companies listed on the Nasdaq stock market. It is one of the world’s most distinguished large-cap growth indexes and includes the largest domestic and international companies based on market capitalization.
On Thursday, Nasqad reported that Peloton stock (ticker: PTON) would be replaced by trucking company Old Dominion Freight Line (ticker: ODLF) in the Nasdaq 100 index on Jan 24. By Friday morning trading, Peloton stock was down 3% to $31.17; the stock has dropped 80% in the last 12 months, and 13% in 2022 so far.
Peloton, a company that sells at-home exercise equipment like bikes and treadmills that go along with a $39.99 a month subscription for interactive live and on-demand classes, enjoyed a surge in demand during the lockdown period that had many people accessing its at-home workout equipment. At that time, Peloton cut down its advertising budget due to the high demand for its bikes- demand the company struggled to fulfil.
However, even with all this promise for a bright future, the company shares sank after the company cut its full-year outlook. A few bullish analysts chopped down their price targets and rating on the stock. Google searches for Peloton’s products and website seemed to predict a rough holiday season that wouldn’t enable the company to turn things around.
Rising bond yields haven’t made the situation easier, since high-growth tech stocks are sensitive because higher yields make future profits less valuable in current terms.