Tech fitness brand Peloton Interactive has seen their shares tank 23% overnight due to bike gear recalls that exceeded their expectations and owners stopping subscription payments.

The business that has been splashing the cash in Australia with a swanky retail store in Martin Place Sydney, recently moved to slash costs due to ongoing problems at the US Company.

Currently the US tech bike manufacturer is trying to get businesses to invest in their bikes in Australia had to recall 2.2M of their high tech peddle machines.

Now a failure to return to a positive cash flow has seen their shares crash to a record low.Peloton claims that they expect to burn cash in the next two quarters due to the costs related to their bike recall and other expenses, and this in turn has delayed a return to a positive cash flow.

It also posted results on overnight that failed to lift the gloom around the company, which has been struggling with waning demand for its fitness equipment as consumers return to gyms and spend more on travel and experiences.

Peloton’s fourth-quarter revenue fell 5% to $642.1 million from a year earlier.

Bloomberg reported that the cost of a seat recall in May substantially exceeded its initial projections.

Peloton has received about 750,000 requests for replacement seat posts, which was more than it expected, according to the statement.

It has fulfilled more than 340,000 requests and expects to fulfill the balance by the end of September.

The recall led to an additional $40 million for costs incurred as well as anticipated future related expenses.

In addition, about 15,000 to 20,000 of the 2.2 million people who were affected by the recall elected to pause their monthly subscriptions in the fourth quarter pending a replacement seat post.

There was also the issue and a US$75 million settlement agreement with DISH Technologies.

Peloton cut costs last year to deal with a slump in demand and had hoped to achieve positive free cash flow by fiscal 2023, which ended on June 30.

CEO Barry McCarthy said the company would ramp up marketing spending ahead of the key holiday season later this year, which will further pressure cash flows.