Posted by & filed under Financial Reporting and Analysis, Marketing & Strategy.

Description: Peleton, the exercise equipment manufacturer that benefited greatly from a pandemic-fueled rise in home exercise, has suffered a loss of $8.5 billion in market valuation after decreasing its sales forecasts for 2022. Net income will also be impacted by a price-cut on Peleton’s flagship bike as well as rising shipping costs. A loss of approximately $375 million in the latest quarter underscores the seriousness of the situation.

Date:  November 5, 2021

Source:  thestar.com

 Link: https://www.thestar.com/business/thestreet/2021/11/05/peloton-stock-faces-85-billion-wipeout-as-home-fitness-craze-fades-sales-forecasts-slashed.html

Discussion points:

1) Have you or your classmates become Peleton users over the pandemic? What has the experience been like?

2) What strategies might traditional gymnasiums employ to recover from the financial hit of the pandemic closures?

3) On page 11-7 in Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about the concept of market capitalization. As a class activity track the market capitalization of some other companies in the fitness business to see how their experience matches up with that of Peleton.

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