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Peloton Interactive has been halted and is falling after a surprise increase in membership fees

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As the organization continues to struggle to gain new customers under the leadership of incoming CEO Barry McCarthy, Class A Report said Thursday that it will raise the price of its linked fitness programs for the first time in eight years, while lowering the price of its hallmark bikes and treadmills.

Starting June 1, the cost of PTON’s all-access membership in the United States will climb from $39 to $44 per person, a 12.8% increase. Customers in Canada will pay C$55 per person, up from C$49 per person previously. International consumer prices would stay ‘temporarily’ unchanged, according to PTON. According to the firm, the price of the PTON cycle will drop $300 to $1,195, while the upscale Bike+ will drop $500 to $1,995. At $2,345 a piece, a PTON treadmill will cost $300 less.

In a statement, PTON added, “We want more people to be able to purchase our hardware.” “This is a deliberate move to grow market share and scale”. PTON shares, which were momentarily stopped from Nasdaq trading, were last spotted trading 4.6% down on the day at $23.88 per share, bringing the stock’s year-to-date loss to about 32.2%.

Following the resignation of CEO John Foley earlier this year, activists at Blackwells Capital, which has a 5% investment in the company, demanded “significant changes” to the company’s business model, prompting the pricing revisions. McCarthy is having trouble retaining clients when gyms and fitness centres reopen and consumers complain about long wait times and high charges for it’s exercise equipment.

PTON expects revenues of $950 million to $1 billion for the upcoming quarter, considerably below Street expectations and negative adjusted earnings of $125 million to $140 million, according to the company. PTON lost $266.5 million in the three months ending in December, solidly within earlier expectations of a loss of $350 million on revenues of $1.13 billion.

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