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May 13, 2022

Peloton surges after previewing long-awaited rowing machine

Peloton plunges to record low after hopes for comeback dim

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Peloton Interactive Inc. shares jumped the most in months after the struggling fitness company previewed its long-anticipated rowing machine, raising hope that it’s poised for a comeback.

A video shown during Peloton’s annual Homecoming event Friday depicted a trainer pulling on the rowing machine. The device has a similar look as the company’s other exercise machines, including a black plastic outer shell that has multiple Peloton logos.

The stock gained as much as 15 per cent to US$15.68 in New York, marking the biggest intraday increase since February.

The company is seeking fresh sources of growth as part of a turnaround effort under new Chief Executive Officer Barry McCarthy, who took the helm in February. Peloton had enjoyed booming sales during the early days of the pandemic, but is now mired in a post-lockdown slump. Even after a rebound the past two days, the shares have lost more than 80 per cent of their value in the trailing 12 months. 

The new device will build on a product lineup that includes entry-level and high-end bikes as well as a treadmill. Peloton briefly sold a higher-end treadmill but recalled it last year due to safety concerns. It hasn’t come back on the market. Peloton also introduced a US$295 strength-training device that works with a TV set.

Peloton didn’t discuss the rowing machine’s name, release date or other details, but said in a statement that it is “excited to add this total body workout into its powerhouse arsenal of content.” Bloomberg first reported on development of the product, which has suffered delays due to Covid-19 and internal company upheaval, in 2020.

At its Homecoming event, Peloton also announced a feature that lets users of its app track non-Peloton workouts, such as running or walking. And it announced plans to reopen its New York and London studios this summer.

McCarthy is looking to shift more of the company’s revenue to subscriptions, but he’s had a challenging first few months in the job. Earlier this week, the company reported a deeper quarterly loss than expected and cut its revenue forecast. At the time, McCarthy described the turnaround effort as “emotionally draining, physically exhausting and all-consuming.”