After a series of major execution missteps, Peloton has an investor knocking down its doors.
Activist investor Blackwells Capital on Monday called on the board of exercise equipment maker Peloton to remove CEO John Foley and start a sale process as the company’s fortunes wane, reports CNBC.
“Mr. Foley must be held accountable for his repeated failures to effectively lead Peloton,” Blackwells chief investment officer Jason Aintabi wrote in the letter. Blackwells contends Peloton should put itself up for sale, highlighting a number of companies as potential buyers.
Peloton, one of the darlings of investors during the early phase of the pandemic when its bikes and treadmills sold in big numbers, has had it rough since infections began to wane and people returned to work and exercising at gyms.
Last week, the company stated it would halt production for two months in the wake of falling demand for its bikes and treadmills. The company denied the report but said layoffs could take place as it attempts to cut operating expenses and improve profitability.
Peloton is now valued at roughly $8 billion USD, down from $50 billion at the peak of its popularity roughly a year ago.
Blackwells is blaming Foley, Peloton’s co-founder and chief executive, for strategic missteps including manufacturing strategies that have contributed to the sharp drop in the stock price and now wants the board to replace him, the sources said.
The investment firm is urging Peloton to sell itself to a company like Disney, Apple, Sony, or Nike.
Peloton’s shares have tumbled more than 80 percent from their all-time high a year ago, as the gradual easing of pandemic-era restrictions fueled concern that growth of the stay-home fitness company will slow. The stock touched a nearly 2-year low last week, after its quarterly earnings missed analysts’ estimates.