(Bloomberg)—A year ago this week, Peloton Interactive Inc. was the darling of the pandemic.

The stock hit an all-time high in January 2021—sending its market value near $50 billion—after stuck-at-home consumers flooded the company with orders. Peloton had recently introduced a new exercise bike and was preparing a push into more affordable treadmills. Its fitness instructors had become celebrities, pulling in annual compensation of half a million dollars in some cases.

But in the 12 months that followed, nearly everything that could go wrong did. The company botched the rollout of its lower-cost treadmill, having to recall both that model and an older version due to safety problems. The higher-end treadmill, linked to accidents and a child’s death, never went on sale again. And as lockdowns eased, many consumers embraced gyms and used their Peloton bikes less frequently.

Sales slowed, and Peloton slashed its annual forecast by about $1 billion. Suddenly, the product that everyone wanted—and no one could get—felt like a passing fad.

It all came to a head on Thursday, starting with a report from CNBC that the company was temporarily halting production of its bikes and treadmills. Peloton confirmed later in the day that it was scrambling to reduce costs, including making cuts to jobs and operations, but pushed back on the idea that it was idling factories to save money.

In a memo to staff, chief executive officer John Foley said “rumors that we are halting all production of bikes and Treads are false.” He said that out-of-context information had given the wrong impression and that the company identified the leaker. “We are moving forward with the appropriate legal action.”

Still, the situation represents a stunning reversal from just months ago, when Peloton couldn’t build enough equipment and customers sat on long waiting lists.

The CNBC report sent the shares down 24% to $24.22 on Thursday, bringing their decline over the past 12 months to 84%. Peloton’s market valuation now stands at less than $8 billion, putting it below the airlines and cruise operators that it had eclipsed during the pandemic.

Foley’s remarks provided some solace to investors, with the stock recovering more than 9% in late trading. The company also released preliminary quarterly results that were nearly in line with analysts’ estimates.

“The decisions being made are likely the right decisions,” said BMO Capital Markets analyst Simeon Siegel. “But what that means is it’s no longer a growth story. It’s a company that’s focusing on cost cutting.”

The company recently hired McKinsey & Co. to evaluate its business and costs. Current and former Peloton personnel, who asked not to be identified, believe that store closures are looming and morale has suffered. Already, some workers from retail locations, online sales and technical-support teams have been let go.

Peloton also is delaying the opening of a $400 million U.S. factory by a year, the New York Post reported. The facility, located in Ohio, will now open in 2024 instead of 2023, according to the newspaper. That could save $100 million to $200 million. Peloton announced the factory last year, saying it would “bring a good portion of our manufacturing to United States soil.”

The company’s image also has taken a hit. In December, it was ambushed by HBO Max’s “Sex and the City” reboot killing off a Peloton-riding character. Mr. Big, played by Chris Noth, drops dead from a heart attack following a 45-minute ride in the show’s first episode.

Investors were already so jittery that the incident hurt Peloton’s stock. Analysts said a fictional death was unlikely to affect sales, though Siegel wondered at the time if the company had “lost control over its storytelling, perhaps its greatest achievement to date.”

Peloton sought to regain the upper hand by casting Noth in a commercial with one of its fitness instructors, Jess King. But it had to quickly pull the ad after sexual-assault allegations against Noth appeared in the Hollywood Reporter.

The company is aiming to rebound from its punishing year by introducing new products, including a strength-training device called the Guide. But the expansion beyond its signature bikes may be slow going. Interest in the Guide has been lower than expected, CNBC said, citing the internal documents. The company has also been working on a rowing machine and acquired Precor in April to push into the commercial fitness equipment market.

As life begins to return to normal in many parts of the world, customers’ appetite for home fitness has waned—and Peloton isn’t alone in suffering. Nautilus Inc. tumbled 8.3% on Thursday as investors fretted about a broader slump.

Peloton slashed its sales forecast in November, sending the stock on its worst rout ever. It has also been facing increased competition from companies like Apple Inc., which has a Fitness+ digital workout service that has been gaining momentum.

Now, months after the forecast reduction, the outlook doesn’t look much brighter. In a presentation from Jan. 10, Peloton said its fitness equipment faced a “significant reduction” in demand globally due to shoppers being more price-sensitive and competition ramping up, according to CNBC.

That suggests a key piece of Peloton’s recent strategy—convincing the world that it’s not just a luxury product for the elite—hasn’t caught hold yet. The company has cut the price of its bikes, but the basic model still costs $1,500. And that doesn’t include the accompanying fees for online access to its classes and content.

Peloton’s president touted in August that it was making inroads with people under the age of 35 who make less than $50,000 a year. But the current slump suggests the bikes remain more of a niche product, especially without pandemic lockdowns.

“When the demand is faltering, it’s harder to ignore what was otherwise easily glossed over,” said Siegel, who has the equivalent of a sell rating on Peloton.