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Peloton stock plummets after the company halts production of bikes, treadmills

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Yahoo Finance's Brad Smith and Akiko Fujita discuss how the market is reacting to Peloton's production pause.

Video Transcript

AKIKO FUJITA: Brad, I want to point to some breaking news that we're getting right now with a hard pivot here, looking at the markets and a specific stock we're watching. Shares of Peloton down nearly 11% after reports here from CNBC that Peloton has temporarily halted production of its connected fitness products with consumers' demand waning.

The company saying in a confidential presentation January 10-- so we're talking about earlier this month-- that demand for its connected fitness equipment has faced a significant reduction. And Brad, I know this is a space that you've been watching really closely. We were just talking about this last week, about the demand and to what extent Peloton can keep things going as more and more people move out of their homes and return back into the regular workout routine.

BRAD SMITH: Right, it is that question of how they can continue to coexist and-- and on premise versus an at-home reality that the workout and fitness setting is moving back into. And so I think, with regard to this, the most notable thing is that it's the bikes and the treadmills, whereas prior in 2021, it was all of the question around the Tread+ and the recalls that we had seen go forth there. But the production for the bikes has also been in focus because of the supply-chain issues that they had faced coming into this year for many of these connected devices. And so that is something that's going to continue to be watched by investors, and you're seeing shares down heavily on this news as well.

AKIKO FUJITA: Yeah, that sell-off accelerating. We're going to continue coverage of that over the next several hours.