A Peloton store earlier this year. Photo by Bloomberg.
The Briefing
Amazon Apple Markets

Peloton’s Covid Hangover Lingers

Photo: A Peloton store earlier this year. Photo by Bloomberg.

How long does the average hangover last—24, 48 hours? It depends on the intensity of the drinking binge, of course. However long, it pales with the post-pandemic hangover many of the companies whose businesses boomed during the early part of the outbreak are going through, as we saw from Peloton’s March-quarter results today. The fitness equipment maker is still grappling with the blunders its former management made by making way too many fancy bikes and treadmills even as demand was waning after Covid-19 lockdowns had ended. That has left it with a costly oversupply of inventory it is now trying to clear with cut-price sales. 

And with revenue dropping, and an improvement still a ways off, Peloton’s market cap has shriveled to just $4.4 billion, from as much as $47 billion during the height of the pandemic. But Peloton is hardly alone in misjudging the temporary lift provided by Covid lockdowns and their aftermath. Look at Amazon, which recently acknowledged it overbuilt and overhired on the warehouse and logistics side of the business as it tried to meet soaring demand. Netflix executives admitted a few weeks ago that they also misinterpreted a slowdown in subscriber growth last year, thinking it was just the after-effects of the pandemic streaming boom rather than a more fundamental shift in the market.

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
The Briefing Crypto Venture Capital
An NBA Battle Could Fuel SF-Miami Feud
Golden State Warriors' Andrew Wiggins (22) and Miami Heat's P.J. Tucker (17) in a game in March. Photo by AP
It has been a rough week for national news, so please excuse us for a little diversionary counterprogramming on this Friday before the long Memorial Day weekend. Several of tech’s most important cities have a great showdown looming! On Thursday, San Francisco’s Golden State Warriors clinched their first NBA finals berth in three years after defeating the Dallas Mavericks to win the Western...
Latest Briefs
 
SEC Confirms Scruitiny Elon Musk’s Initial Disclosure of Twitter Stake
Twitter Board Rejects Shareholder Vote to Oust Silver Lake’s Durban
Chinese E-commerce App Pinduoduo Reports Better-Than-Expected Results
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Roelof Botha, partner at Sequoia Capital. Photo by Getty
Exclusive Venture Capital Startups
Sequoia Warns Founders of ‘Crucible Moment,’ Advises How to ‘Avoid the Death Spiral’
Sand Hill Road’s doomsayer-in-chief—Sequoia Capital—is back with a warning to its startup founders: Don’t expect a recovery from the current market downturn to happen quickly.
Netflix co-CEO Reed Hastings. Photo by Bloomberg.
True Value Entertainment
Netflix Could Boost U.S. Revenue 21% With Advertising Push
Netflix has spent its entire existence setting the trend for others in video streaming to follow. But as it prepares to launch an ad-supported tier, Netflix executives are pondering a different question: Which rival service should it follow as a model?
Photo by Bloomberg
Exclusive
A Top China VC Firm Struggles to Raise Funds After 10% Return, U.S. Investor Fears
Despite a difficult climate for raising money, at least four top-tier Chinese venture capital firms set ambitious goals to raise billions of dollars this year from Western institutional investors.
Dan Levitan, co-founder of Maveron. Photo by Maveron.
Exclusive Venture Capital Startups
Consumer VC Firm Maveron Raises $225 Million Amid ‘Serious Paradigm Shift’
Venture firm Maveron, whose well-timed investments in eBay and Drugstore.com helped it get through the 2000 dot-com bust with relative ease, had a tougher time during the financial crisis eight years later, when it was forced to downsize and narrow its focus to early-stage investing in consumer brands.
Brian Armstrong, chief executive officer of Coinbase. Photo by Bloomberg.
Exclusive Crypto Culture
Coinbase Tests App for Employees to Grade Each Other During Meetings
Coinbase, a cryptocurrency trading firm that garnered attention for banning salary negotiations and political speech among employees in recent years, is testing another practice that has raised eyebrows internally: asking employees to frequently rate each other.
Art by Mike Sullivan
Crypto Venture Capital
VC Pay Surged Again in 2021, but Future Jumps Are in Jeopardy
It’s hard to find venture capitalists right now who aren’t telling their startups to tighten their belts.