By Dhirendra Tripathi
Investing.com – Peloton (NASDAQ:PTON) stock traded 0.6% lower in premarket Thursday amid reports the maker of fitness equipment is testing new pricing plans.
According to The Wall Street Journal, the company on Friday will start testing a new package in which customers pay a monthly fee that covers both the namesake stationary bike and a monthly subscription to workout courses. If a customer cancels, Peloton will take back the bike with no charge.
Stores in Texas and Florida will begin bundling $60-$100 monthly subscriptions Friday onward, the report said. This will be a limited period offer and is intended to help the company discover a profitable price proposition, the report said.
The purpose is to position Peloton as a service that can be dropped any time compared to a costly hardware that comes with a subscription.
The new strategy is the brainchild of former Netflix CFO Barry McCarthy who took over as CEO last month after pressure from investors forced co-founder John Foley to leave that room.
McCarthy’s appointment followed a tumultuous year for the company where it went from being a pandemic winner to a big loser as a waning virus and reopening of economies returned people to parks and gyms outside.
The company decided to cut costs and talked about layoffs even before attempts at going mass-market with reduced product prices could yield results.
It lost more than 80% of its market value which led to speculation it could become a takeover target. Media reports named Amazon (NASDAQ:AMZN), Nike (NYSE:NKE) and Apple (NASDAQ:AAPL) among potential suitors.