The reduction in price target by a significant margin from $5.75 to $3.5 by Goldman Sachs, a major financial institution, suggests a bearish outlook on the stock's short-term price potential. This adjustment reflects concerns or adjustments in the valuation model used by Goldman Sachs, likely due to Peloton's performance or market conditions. Investors often react to such adjustments by re-evaluating their positions, which can lead to a decrease in stock price in the short term.