Shares of Peloton Interactive tanked over 6% Tuesday after noted short vendor Andrew Left valued the seller of stationary exercise bicycles at about one-seventh of its current stock price.
Left’s Citron Research recommended that the Peloton’s bikes, priced at over $2,200, and its streaming exercise video platform face competition from competitive, cheaper rivals. It forecasted Peloton’s stock would plunge to $5. The stock fell from $2.32 to $32.45 after the report.
Peloton did not instantly reply to a request for comment concerning the Citron Research report.
Peloton, which went public in September at $29 per share and is losing money, has lodged cases against Echelon Fitness, alleging it violated its patents and sold “cheap, first-copy” merchandise. New York stationed Peloton has also filed a suit against Flywheel Sports, which sells its stationary bikes with built-in tablets.
Left is undoubtedly one of Wall Street’s most prominent short-sellers, and his reports before now have damaged shares of agencies along with Twitter, GoPro, Wayfair, and e-commerce platform Jumia Technologies.
However, Oppenheimer analyst Jason Helfstein, who recommends investors buy Peloton’s stock, raised his worth target to $38 from $29 Tuesday, saying the corporate is likely to progress faster than its competitors and pointing to heavy site traffic and improving customer satisfaction.
Citron Analysis stated its $5 target value relies on comparability with other subscription-based firms’ market capitalizations per subscriber.
With Tuesday’s plunge, Peloton is down 12% from a week ago, when came across criticism for a Christmas ad some called “sexist,” and before it cut subscription prices for its video streaming platform.