Peloton market cap falls as Citron Research said the exercise equipment company is really worth $1 billion and not $8.8 billion, claims you can turn any exercise bike into a Peloton for $12

Another day, another bad news for exercise equipment company, Peloton. Losses mount as Citron Research wrote a scathing report today saying “Unless Peloton invents a piece of equipment that works out for you – this is going to $5 (which is still a $1BN-$2BN market cap).” Two days ago we wrote about how Peloton lost $1 billion in market capital due to sexist “Peloton Girl” bike ad.

Peloton’s share price fell further Wednesday, as Peloton investors continued to feel the burn from a damning report that comes on the heels of social media blowback from its widely mocked “Peloton girl” Christmas ad. The Citron analysts argue that Peloton’s digital strategy is flawed while its hardware capabilities are both behind the competition and undeserving of a premium multiple it currently enjoys. The report alluded to “obvious comparisons to GoPro and Fitbit and history of fitness products in the public marketplace.” Citron said it regret that it wasn’t “more aggressive” on its GoPro short call after issuing a bearish report on the company in 2014.

After setting a $5 price target on the stock, Citron said it expects Peloton stock to plunge nearly 85 percent. Peloton shares fell by seven percent Wednesday after a Citron Research’s report concluded it was overvalued by almost $8 billion. The stock was valued at about $8 billion at its IPO, which was roughly double its market valuation from just more than a year ago. Shares of Peloton went south by down another $2.25 on Wednesday, after falling $2 on Tuesday, to $30.50 at market close.

In an article titled” “Citron Research Presents Peloton – Investors Pedaling Themselves into Frenzy,” Citron Research’s Andrew Left wrote: “The lack of differentiation between Peloton and its lower priced competitors is best highlighted by Peloton’s lawsuits against Echelon Fitness and Flywheel Sports.” Andrew also quoted Bloomberg saying:

Note: legal experts don’t believe Peloton has a real case as noted in Bloomberg Law: “Peloton didn’t invent computerized exercise equipment that could let users compete remotely with other users. Nor did it invent the touchscreen, the exercise bike, spin classes or on-demand programming.”