Blackwells Capital wants Peloton to sell itself to fitness company

According to sources familiar with the matter, Blackwells Capital wants Peloton Interactive to fire its chief executive and sell it to a fitness or technology company that offers stationary bikes and treadmills with livestreamed workouts from popular instructors in one of the market's hottest stocks, but the stock price has plummeted 84 per cent in the last year.

Peloton is valued at about US $8 billion, a decline from US $50 billion at the peak of its popularity a year ago.

Blackwells blames John Foley, Peloton's co-founder and chief executive, for strategic missteps, including manufacturing strategies that have contributed to the sharp drop in stock price, and now wants the board to replace him, the sources said.

One of the sources said that the investment firm, run by Jason Aintabi, is urging Peloton to sell itself to a company like Disney, Apple, Sony or Nike.

Blackwell's campaign against Peloton was first reported by the Wall Street Journal.

A representative for Blackwells didn't immediately respond to a request for comment, and Peloton didn't respond immediately to a request for comment.

Peloton's fortunes have been fading as customers start to withdraw from its classes when gyms are reopened and other companies offer rival products.

The trouble started very recently. Its stock price went down 24 per cent last week, wiping away US $2.5 billion in value last week, after CNBC reported that Peloton was temporarily halting production of its bikes and treadmills due to lower demand.

Foley wrote to his employees that layoffs would be the last lever the company would ever hope to pull, but he said that it was considering all options as part of its efforts to make our business more flexible. The company is scheduled to release earnings on February 8 and Foley said more details would be announced.

Blackwells has successfully pushed for change at companies like Colony Capital and posted very strong returns during the early part of the epidemic when many activists were nursing losses.