What happened
Shares of Peloton Interactive (PTON +2.09%) declined by 11.3% on Thursday, as coronavirus-related fears sparked a brutal sell-off in financial markets around the world.
So what
With COVID-19 -- the disease caused by the novel coronavirus -- now spreading throughout the U.S., investors are rightfully concerned that the outbreak will bring about a recession. Businesses, schools, and gatherings of all types are being closed and canceled. And while fears of shortages and being forced to remain at home for long periods are driving people to do more shopping now, consumer spending is likely to die down considerably in the coming weeks and months.
Government leaders and central banks are trying to battle back a potential recession by promising to cut taxes and increase stimulus measures, but many investors question whether that will be enough to stem further declines.
Image source: Getty Images.
Now what
At one point on Thursday, Peloton's share price hit an all-time low near $18. Shares are now well below Peloton's initial public offering price of $29 in October, and the stock is looking increasingly like a bargain.
While the purveyor of high-priced, in-home exercise equipment could certainly lose some sales if the economy contracts, it could also see a sales boost from people seeking alternatives to going to the gym during the middle of a disease outbreak.
