Peloton's CEO has denied halting production of bikes and treadmills after shares in the exercise company plummeted 27 per cent Thursday.
Co-founder John Foley tried to quash the damaging 'rumors' after a leaked presentation revealed the company has seen a 'significant reduction' in demand for the products.
Foley said in a statement: 'Rumors that we are halting all production of bikes and Treads are false.'
He added that the company had 'experienced leaks' this week 'containing confidential information that have led to a flurry of speculative articles in the press'.
But he said this information was 'incomplete, out of context and not reflective of Peloton's strategy', adding that the leaker had been identified and legal action will be launched.
The report, seen by CNBC, said the company planned to pause bike production in February and March and not manufacture the Tread treadmill machine for six weeks, beginning in February.
The revelations prompted the share prices to plummet to $24.22 on Thursday, a two-year low.
It had been previously reported that the company is not looking to produce any Tread+ machines in fiscal year 2022 and has thousands of cycles and treadmills lying in warehouses or on cargo ships,.
It is unknown how many products are currently sitting in warehouses.
Last May, the company had announced it was building a $400 million warehouse in Ohio to speed up production, but the facility isn't expected to be ready until 2023. The company has since declined $40 billion in value.
Peloton's CEO John Foley (pictured) has denied halting production of bikes and treadmills after shares in the exercise company plummeted 27 per cent Thursday
The revelations prompted the share prices to plummet to $24.22 on Thursday, a two-year low
Foley tried to quash the damaging 'rumors' after a leaked presentation revealed the company has seen a 'significant reduction' in demand for the products
Peloton has been drowning in scandal in the past years as last May the company had to recall its Tread+ after reports of children dying from being crushed came out
In 2020, the company saw a 440 percent increase in shares, but saw it dramatically dropped 76 percent in 2021 as COVID lockdowns ended and gyms reopened.
In December 2020, the company's stock hit an all-time high of $151.72 after many customers wanted to continue working out from their homes following many brick-and-mortar gyms temporarily closing due to COVID - but that trend has since reversed.
It put the company at a $45.7 billion value, and it couldn't keep up with pandemic demand, as customers waited months for products.
Once a pandemic darling, Peloton has seen a slump in demand for its fitness classes and equipment as people venture out of their houses to hit gyms again.
The company initially set expectations too high for the third and fourth quarters and had to re-evaluate on December 14, dropping the expected sales on the Bike, Bike+, and Tread 'significantly,' according to CNBC.
However, the company's presentation reportedly does not take into account the upcoming fee change for delivery and setup - which will be between $250 to $350, depending on the product - which will change at the end of the month, CNBC reported.
In addition, the company isn't getting much traction for its upcoming 'Project Tiger' - or formally known as Peloton Guide - a $495 package consisting of strength training products and programs, which has since made the company realize it will face a 'more challenging post-COVID demand environment.'
Project Tiger was initially set to be released last October, but has been pushed back to February and could be further delayed to April. The company also decreased the original price of $595 by $100.
Like sales, the company saw a decline in subscribers, with only 2.5 million in the last quarter - 161,000 were new users - but it was the lowest growth in two years.
The scandal-ridden company has seen its stock prices change drastically throughout the year as it has found itself embroiled in bad press.
In May last year, the company was forced to recall 125,000 treadmills following reports of multiple injuries and the death of a child in an accident. U.S. regulators are investigating the company over the injuries.
Peloton received 72 additional complaints of adults, kids and pets being pulled under the back of the treadmill, resulting in 29 injuries, the Consumer Product Safety Commission (CPSC) said.
The safety agency also released a video that showed how a person could become trapped by the device.
In November, it slashed its full-year outlook by up to $1 billion with analysts warning about a tough path was ahead.
The first episode of the highly anticipated reboot And Just Like That also didn't shine a great light on the company after Mr. Big died of heart attack on one of the company's bikes in the show
Mr. Big was killed off in the premiere episode of the Sex and the City reboot, And Just Like That after suffering a heart attack following a workout on a Peloton bike
Peloton was also the subject of a Sex and the City reboot And Just Like That episode last month that suggested the company's exercise bikes could be lethal.
Carrie Bradshaw's husband, Mr. Big, slumped to the ground moments after wrapping up a cycle session with his favorite instructor. He died of a heart attack in the episode.
Peloton later retorted that its equipment did not contribute to the fictional character's death, which it blamed on his cigar-smoking and unhealthy diet.
Peloton later responded with a parody ad of its own, but retracted the ad after actor Chris Noth, who plays Mr. Big, was accused of sexual assault.
The company also announced earlier this week that it is considering closing 20 percent of its showrooms after slashing its full-year outlook by $1 billion.
One executive said 15 of Peloton's 123 showrooms 'are on the line' as the company seeks to trim expenses.
Management during a recent call discussed asking employees at retail stores to take on more responsibilities by manning customer service lines when they're not busy in the store, CNBC reported.
Peloton is set to release its second-quarter figures on February 8.
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