Peloton's cash-crunch warning pounds shares

STORY: Shares of Peloton Interactive fell as much as 20% to a record low Tuesday morning, after the company reported a worse-than-expected quarterly loss and a steep decline in sales, as unsold fitness equipment piled up at warehouses.

Peloton also forecast weak sales as it wrestles with waning demand for its stationary bikes and treadmills amid concerns of subscription cancellations due to price hikes.

Peloton's market value has crashed to less than $5 billion from a peak of nearly $50 billion during the global health crisis when its bikes and on-demand fitness content were lapped up.

CEO Barry McCarthy warned Peloton is "thinly capitalized," as costs have mounted for the company.

In a letter to shareholders, McCarthy said: "Inventory has consumed an enormous amount of cash, more than we expected, which has caused us to rethink our capital structure."

Earlier this year, Peloton replaced its chief executive officer with McCarthy under pressure from an activist investor and unveiled measures including price cuts for its equipment while focusing on its subscription plans to turn around the company.

To pay the bills, Peloton said it had signed an agreement with JP Morgan and Goldman Sachs to borrow $750 million.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting