Written by Brenda Nakalema

Peloton stock dropped out of Nasdaq 100

The Peloton stock woes only deepened towards the end of 2021, and it hasn’t done much better in 2022. In …

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.