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January 24, 2022 06:43 pm

Peloton Should Put Itself Up for Sale and Fire Its CEO, Activist Investor Demands

The knives are out for Peloton and CEO John Foley. From a report: Blackwells Capital, an activist investor that owns less than 5% of Peloton, says it has "grave concerns" about its performance and is calling on its board of directors to fire Foley immediately and explore a sale. In an open letter Monday, the investment firm sharply criticized Peloton for not capitalizing the success it achieved in 2020, saying it squandered the opportunity to grow sales of its internet-connected bikes and treadmills. Peloton shares have tumbled 80% from their peak, bruised from sagging sales, a massive recall and PR nightmares in popular TV shows. Blackwells' Chief Investment Officer Jason Aintabi said the company is currently on "worse footing today than it was prior to the pandemic, with high fixed costs, excessive inventory, a listless strategy, dispirited employees and thousands of disgruntled shareholders." To turn around Peloton's fortunes, Blackwells suggests firing Foley for his "repeated failures," listing 10 examples. They include his pricing strategy (Peloton cut the price on its Bike and Tread in August 2021, only to raise them again months later), his handling of the treadmill recall and a purported temporary shutdown of production. Blackwells also slammed Foley for hiring his wife as a key executive.

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