A Peloton exercise bike is seen after the ringing of the opening bell for the company's IPO at Nasdaq Market in New York City, New York, September 26, 2019. Jan 24, Reuters - Activist investor Blackwells Capital called on Monday the board of exercise equipment maker Peloton Interactive Inc PTON.O to remove Chief Executive John Foley and start a sale process as the fortunes of the pandemic winner start to wane.
Foley is ill-suited to lead a company and must be removed from the board, according to a letter to the board, asking it to begin the sale process to maximize the value of Peloton's brand, team, customer base, and technology.
Blackwell is urging Peloton to consider a sale to a company like Walt Disney Co DIS.N Apple Inc AAPL.O Sony Group 6758. T or Nike Inc. reported on Sunday. The coronaviruses have turned Peloton into one of the market's hottest stocks, as it offers stationary bikes and treadmills with livestreamed workouts from popular instructors.
Its stock price has plummeted 84% in the last year, and it is now valued at around $8 billion compared to $50 billion at the peak of its popularity.
Blackwells said that the company is on a worse footing today than before the epidemic, with high fixed costs, excessive inventory, a listless strategy, dispirited employees and thousands of disgruntled shareholders.
The activist investor letter came after a CNBC report said Peloton was temporarily halting production of its bikes and treadmills due to lower demand. Foley, who has been leading the company for nearly a decade, dismissed the report as false, but it caused the stock price of Peloton to drop 24% on Thursday, wiping off $2.5 billion from its market value.
According to the company's website, Foley started off as an engineer for Mars Inc in 1990 and was president of Barnes and Noble in 1990.