5 Tech Stocks to Avoid As Inflation Heats Up

4. Peloton Interactive, Inc. (NASDAQ:PTON)

Number of Hedge Fund Holders: 39 

Loss in Share Price Year-to-Date as of September 21: 72% 

Peloton Interactive, Inc. (NASDAQ:PTON) operates interactive fitness platforms in North America and internationally. On September 20, the firm made a formal unveiling of the Peloton Row product. The release marks the anticipated entry by the company into the rowing category. Peloton Row will list with a starting price of $3,195. This price includes delivery and set-up. Pre-orders in the US have started already and the company expects deliveries in this regard to begin in December.

On September 2, UBS analyst Arpine Kocharyan maintained a Sell rating on Peloton Interactive, Inc. (NASDAQ:PTON) stock and lowered the price target to $8 from $13, identifying the lower sales and continued subdued profitability outlook of the firm as some of the reasons behind the bearish outlook. 

At the end of the second quarter of 2022, 39 hedge funds in the database of Insider Monkey held stakes worth $338 million in Peloton Interactive, Inc. (NASDAQ:PTON), compared to 44 in the preceding quarter worth $723.6 million. 

In its Q2 2022 investor letter, Rowan Street Capital, an asset management firm, highlighted a few stocks and Peloton Interactive, Inc. (NASDAQ:PTON) was one of them. Here is what the fund said:

“Peloton Interactive, Inc. (NASDAQ:PTON) has been a costly mistake for the fund thus far. We started a small position back in September of 2020 and added to it as the stock declined and the price got “cheaper and cheaper”.

We would like to walk you through the rationale why we bought the stock in the first place and why we added to the position. We will give you just a short summary in the main body of the letter, and for those who are interested in a more detailed version, we have included a write-up on Peloton in the Appendix at the end of this letter.

The trial is still out whether we made a mistake on the company, but we definitely made the mistake on the weighting of our position and the price that we originally paid…(read more)