Peloton Interactive Inc PTON shares are trading higher Tuesday after the company announced it's exiting all owned-manufacturing operations and expanding its current relationship with Taiwanese manufacturer Rexon Industrial.
Rexon will become the primary manufacturer of the hardware for Peloton's Bike and Tread products. Peloton also plans to suspend operations at its Tonic Fitness Technology facility through the remainder of 2022.
Peloton said the shift is a natural progression in the company's strategy to simplify its supply chain and focus on technology and best-in-class content.
"We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility," said Barry McCarthy, CEO of Peloton.
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PTON Price Action: Peloton has traded between $127.57 and $8.73 over a 52-week period.
The stock was up 5.26% at $9.38 at press time, according to data from Benzinga Pro.
Photo: courtesy of Peloton.
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