Peloton shares plunge to 21-month low after Nasdaq says it was axed

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Peloton shares plunge to 21-month low after Nasdaq says it was axed

Shares of Peloton Interactive Inc. extended their plunge to a 21 month low Friday after Nasdaq said it was removing the at- home fitness company from its Nasdaq 100 Index just 13 months after it was added.

The stock PTON, sank 5.3% in the afternoon, putting it on track for the lowest close since April 2020.

Before the opening bell on January 24, Nasdaq said late Thursday that Peloton will be replaced by Old Dominion Freight Line Inc. ODFL in Nasdaq 100.

Old Dominion's stock fell 2.0% on Friday, but it has risen by more than 50% over the past 12 months to lift its market value to $35.9 billion from $24.3 billion last year, according to FactSet data.

The Nasdaq 100 NDX is composed of the 100 largest non-financial companies by market cap that are listed on the Nasdaq exchange. Peloton currently has the lowest market cap in the index at $10.05 billion, or nearly half the next-lowest market cap, which is Splunk Inc.'s SPLK, $19.04 billion.

Peloton was one of Wall Street's hottest post-pandemic plays in 2020, as gym closures sparked a work-in boom. The stock had skyrocketed 640% from March 2020 closing lows of $19.51, which was hit the day after the World Health Organization declared the COVID 19 outbreak a pandemic, through Dec. 21, 2020, which was Peloton's first day as a Nasdaq 100 component.

Peloton's market cap was $42.1 billion on December 21, 2020. The stock went up even further to reach a record $167.42 on January 13, 2021, for a market cap of $49.3bn, as the daily average of COVID 19 cases rose to what was then record levels.

Peloton's fall from grace since then has been nothing short of stunning. The stock has fallen 79% since entering the Nasdaq 100, wiping away $32 billion in market cap, even as daily COVID 19 cases are more than triple the January 2021 record. You can read MarketWatch's daily Coronavirus Update column.

Don t miss: Peloton stock keeps falling as J.P. Morgan analyst slashed price target, but remains bullish.

Here is how the shares of the other companies that entered the Nasdaq-100 at the same time as Peloton have performed since then, and their current market caps:

The S&P 500 index SPX has gained 25.1%, while the Nasdaq-100 has gained 21.8% over the same time.

Truist analysts Michael Swartz and Youssef Squali said Friday that they remain high on the at-home fitness trend and believe Peloton will be a prime beneficiary.

A recent survey of about 1,400 adults showed that there hasn't been a reduction in at-home exercise interest or participation despite widespread gym re-openings and vaccine availability.

This reinforces the belief that habitual changes made over the past 22 months will ultimately yield a larger at- home fitness TAM total addressable market, the analysts wrote in a note to clients. We believe it is too early to change constructive on the name due to near-term performance uncertainty, and that is why Peloton is starting to warm up to the name again after a number of positive takeaways from this survey. Truist has rated Peloton on hold since Nov. 5, 2021, after being at buy for the two years prior. The company went public in September 2019 at an initial public offering price of $29.

The stock suffered a record 35.4% plunge on November 5, 2021, after Peloton had reported a wider-than-expected fiscal first-quarter loss and revenue that came up short of forecasts, with Chief Financial Officer Jill Woodworth admitting that the impact of reopening was underestimated. The next earnings report is expected to be released in early February.