Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Peloton Gains Amid Calls for CEO’s Ouster, Sale of Firm

Published 01/24/2022, 08:18 PM
© Reuters

By Dhirendra Tripathi

Investing.com – Peloton stock (NASDAQ:PTON) stock was up 1.2% in Monday’s premarket trading amid calls by activist investor Blackwells Capital on the company to fire chief executive John Foley.

According to The Wall Street Journal, the investment firm, run by Jason Aintabi, is also urging the fitness equipment maker to consider selling itself. A Reuters report named Disney, Apple (NASDAQ:AAPL), Sony (NYSE:SONY) or Nike (NYSE:NKE) as suitors suggested by the fund.

Blackwells owns less than 5% of Peloton.  

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, CNBC said the company 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. 

Blackwells argues Peloton is weaker today than before the pandemic, the WSJ said.

From its lifetime high of nearly $55 billion around a year back, the company’s market cap has dwindled to less than $9 billion. It now trades below its September 2019 IPO price of $29.

As the world began to adjust to a post-pandemic scenario, the company first tried to broaden its consumer base by slashing prices. But even before that could fully play out, the company was forced into beginning charging separately for delivery and setup of its equipment in the U.S., its largest market.

Blackwell’s push at Peloton comes ironically at the same time as private equity KKR is buying Accell (AS:ACCG), a Dutch-based maker of real-world bicycles, for 1.5 billion euro (around $1.7 billion). Accell’s stock surged 24% in Amsterdam trading.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.