Sources said that Blackwells Capital LLC wants the stationary-bike maker Peloton Interactive Inc NASDAQ: PTON to fire CEO John Foley and explore a sale.
What Happened: The activist investor believes that the exercise equipment maker could be an attractive acquisition target for larger technology or fitness-oriented companies.
Blackwells, which has less than 5% of the stake in Peloton, believes that the company is weaker than before the epidemic and blames Foley for most of the blame.
See also: Peloton Analysts Cut Price Target By 45% Following the latest Sell-Off.
Why It Matters: Peloton shares plummeted 24% after a CNBC report said the company is temporarily halting production of its bikes and treadmills to control costs due to demand for fitness equipment.
The shares were up by 11% on Friday, but fell by 83% over the last year.
Foley, in a statement on Friday, dismissed the CNBC report and said the company had no plan to halt the production of bikes and Treads.
The Peloton CEO said the company is taking significant corrective actions to improve our profitability outlook and optimize our costs, and will share more details with earnings on February 8, as noted by WSJ.
Price Action: Peloton shares closed 11.7% higher at $27.06 a share. The stock is down 23% year-to-date.