Shares of Peloton surge 11% after David Einhorn says stock is significantly undervalued

Shares of Peloton spiked greater than 11% on Wednesday after Greenlight Capital’s David Einhorn stated shares of the corporate are considerably undervalued, CNBC has realized. 

Einhorn made the pitch on the Robin Hood Traders Convention. It was not instantly clear what Einhorn believed Peloton shares ought to commerce at.

He made the case for the corporate as he was driving a Peloton bike, an individual aware of his remarks stated. 

Over the summer time, Greenlight Capital, the hedge fund that Einhorn based in 1996, disclosed it had a $6.8 million stake within the firm as of June 30. 

Peloton’s inventory tends to be unstable and is up slightly greater than 1% to date this yr, as of Tuesday’s shut. 

Einhorn’s feedback come at some point after the corporate introduced it was partnering with Costco to promote its Bike+ within the retailer’s shops and on-line because it seems to be to succeed in youthful, wealthier shoppers with the discretionary revenue to purchase dear train tools. 

The corporate is at present being led by two board members after CEO Barry McCarthy stepped down earlier this yr. It’s within the means of discovering a brand new CEO and expects to announce its subsequent prime government this yr.

When reporting earnings in August, Peloton indicated it was able to focus extra on profitability over development after finishing an enormous refinancing that pushed out its debt maturities and purchased it a while to have an effect on a turnaround. 

Peloton didn’t instantly reply to CNBC’s request for remark.