Peloton Stock Plummets After Dismal Revenue Forecast

PTON was already down more than 60% year-to-date

Deputy Editor
May 10, 2022 at 10:15 AM
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Things just keeping getting worse for Peloton Interactive Inc (NASDAQ:PTON), with the fitness equipment maker's shares plummeting 17.1% to trade at $11.72 at last check, thanks to a dismal showing in the earnings confessional. The company reported fiscal third-quarter losses of $1.25 per share on revenue of $964.3 million, both of which missed analysts expectations, while its projected current-quarter revenue also came in well below forecasts. Peloton's CEO said the company finished the quarter "thinly capitalized," as inventory sits in warehouses, eating away at the company's cash.

On Friday, Peloton stock took a step back after a Wall Street Journal report revealed the company was looking to sell a substantial amount of its minority stake, though interested investors had yet to be found. PTON is once again trading at a new record low. Coming into today, thanks in part to a 33.5% loss in April, the equity already sported a 60.5% year-to-date deficit.  

It's not surprising then that the options pits are firmly bearish on Peloton stock. This is per the security's 10-day put/call volume ratio of 1.15 at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 75% of readings from the last 12 months. This means that the penchant for long calls has rarely been more healthy. 

Today's pits echo a similar appetite for bearish bets. Already, 60,000 puts have crossed the tape, which is 11 times the intraday average. When when paired with the 34,000 calls traded so far, total options volume is running at 11 times what's typically seen at this point. The most popular contract is the 5/13 15-strike call, followed by the 10-strike put from the same weekly series, with new positions being opened at both.

 

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