Peloton, the makers of an internet-connected exercise bike, saw their stock price drop 35% overnight on Thursday, reports CNBC. “At least four Wall Street investment firms downgraded the stock following Peloton’s dismal fiscal first-quarter financial report… Peloton’s stock has fallen 63% year to date.”
The company had cut its annual revenue forecast — by $1 billion — and lowered its projections for both profit margins and paying subscribers. Bloomberg reports:
At best, Peloton currently expects to have 3.45 million connected fitness subscriptions by the end of the fiscal year. It had previously called for 3.63 million. And gross profit margin will be 32%, compared with an earlier forecast of 34%. All that will add up to a loss of as much as $475 million, excluding some items….
On a more upbeat note, the company hinted that it plans to launch new products in the coming weeks and months. Peloton has been working on a rowing machine and a heart-rate monitor that attaches to a wearer’s arm, Bloomberg News has reported.
The article suggests Peloton’s business was hurt by the end of lockdowns, supply-chain constraints, and the cost of freight. But they also point out another factor. “Like several other companies, Peloton also blamed Apple Inc.’s ad-related privacy changes, which have made it more difficult to target shoppers based on their interests.” Apple’s new Ad Tracking Transparency feature (or “ATT”) now first asks users to deny or allow apps to track their activity for the targeted advertising which had apparently been boosting Peloton’s business.
And tlhIngan (Slashdot reader #30,335) tipped us off to a larger trend, since Gizmodo reports that Peloton “isn’t the only company that has pointed accusingly at Apple lately.”
When reporting its third quarter earnings at the end of October, Facebook (now called Meta) — which depends on targeted ads for almost 98% of its revenue — said that ATT had decreased the accuracy of its ad targeting. The feature also increased “the cost of driving outcomes” for advertisers, Facebook COO Sheryl Sandberg explained, and made it harder to measure those outcomes. “Overall, if it wasn’t for Apple’s iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth,” Sandberg said.
On Sunday, the Financial Times reported that ATT had cost Snap, Facebook, Twitter, and YouTube an estimated $9.85 billion in lost revenue in the second half of this year. That’s an 87% increase year over year.
Read more of this story at Slashdot.