An activist investor is calling on beleaguered Peloton Interactive (NASDAQ: PTON) to terminate its CEO and sell itself to a better performing tech or fitness company, as the exercise equipment maker continues to suffer from poor demand and a swiftly deteriorating stock price.
According to the Wall Street Journal which cited people familiar with the matter, Blackwells Capital LLC, an activist investor, is urging Peloton’s board members to fire its co-founder and CEO John Foley, as the company’s growth fails to materialize amid diminishing demand. Blackwells is blaming Foley for various strategic errors such as poorly executed manufacturing strategies, which have ultimately sent the company’s stock plummeting by nearly 85% over the past year.
What started out as one of the hottest stocks across markets during the height of the pandemic, Peloton has rapidly lost its luster after a series of safety incidents put its treadmill under scrutiny, and the lifting of Covid-19 restrictions prompted consumers to return to gyms and fitness centres. Now, Peloton’s valuation is down from a peak of $50 billion nearly one year ago, to a paltry $8 billion as of current.
Blackwell is also pushing Peloton to sell itself to either a technology or fitness company such as Apple, Sony, Disney, or Nike to spare itself further losses.
Information for this briefing was found via the WSJ. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.