Peloton Shares Fall 9% Thanks to Controversial Holiday Ad

Peloton’s stock fell due to an ad that viewers claimed was sexist and classist.

Peloton’s shares have been on a bumpy ride ever since its September IPO, but it seemed like the company was picking up traction in recent months. In November, the stock rose 15% and hit a 52-week high of $37.02 per share.

But that positive momentum was wiped out this week thanks to a holiday ad the company released. Many viewers responded negatively to the advertisement, calling it confusing, sexist, and classist.”

This backlash caused the company’s shares to fall 9%, wiping out over $900 million in market value overnight. 

Details on the holiday ad

Peloton originally released the ad in early November, and it’s being shown on television and YouTube. In total, the ad has been shown more than 7,000 times since it was released. 

The ad features a fit, attractive woman receiving a Peloton bike as a Christmas gift from her husband. She then films herself working out over the course of a year. 

At the end of the ad, the woman thanked her husband for gifting her the Peloton bike a year earlier. Since being released, the ad has been parodied by comedians and inspired countless social media memes. 

This negative backlash underscores a major pain point for Peloton. The company struggles to shake its image as a luxury brand for high-end consumers. 

Management has stated that it wants to appeal to a broader range of customers, but it’s not putting its best foot forward with this ad. The bike in the video costs $2,245 to purchase, and there’s a $39 monthly subscription to access online classes.

Will the backlash hurt the company’s holiday sales?

For its part, Peloton stood by the ad, saying it was disappointed that many viewers had misunderstood the point of the ad. The company stated it had received many positive messages from individuals who were inspired by the ad.

While the holiday ad may not have helped Peloton, it probably won’t hurt them too much over the long run. A Raymond James analyst called the reactions “disappointing,” but said it shouldn’t significantly impact the company’s holiday sales.