Peloton/YouTube

Shares of Peloton, the buzzy bike startup, fell more than 9% on Tuesday as backlash to a new holiday ad built on social media.

That erased nearly $942 million from Peloton's market value in a single day, bringing the company's market cap to roughly $9.4 billion. It was also the biggest single-day drop for the company since October.

The backlash to Peloton's holiday ad, which features a young woman filming herself working out over a year after being given a Peloton bike, reached a breaking point this week, as it struck some viewers as confusing, sexist, and classist. The ad was released in mid-November but was published on YouTube on November 21 and is being shown on TV.

Now there are rumors that the ad could be pulled, The New York Times reported.

Peloton's response and the adverse reaction to the ad are "worth monitoring," Justin Patterson, an analyst at Raymond James, wrote in a Tuesday note. He said he thinks that the ad might be taken off the air and that the controversy will eventually die down.

Peloton did not respond to Markets Insider's request for comment.

Peloton shares gained at a steady clip in November and reached an all-time high for the newly public company on Monday, before the holiday-ad controversy picked up. The exercise company has lost ground to make up after its initial public offering wiped out $900 million of investor value on the first day of trading.

Peloton shares were up about 15% from their September IPO through Tuesday's close.

Markets Insider

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