Investor Wants Head Of Peloton CEO For Mismanagement

Blackwells Capital, an activist investor that owns less than 5% of Peloton, said it has "grave concerns" about the company and is calling on its board of directors to fire CEO John Foley immediately and to explore a sale, CNN reported.

Photo Insert: Peloton CEO John Foley

Among the firm’s grievances: Peloton failed to capitalize on its 2020 success and is now hobbled by a glut of inventory and much lower demand; shares have tumbled 80% from their peak and fell below its IPO price for the first time since the company listed its shares in 2019; Foley’s “repeated failures,” such as a head-scratching decision to cut prices on Peloton’s Bike and Tread, only to raise them again a few months later, and; Foley’s has been accused of dragging his heels on a treadmill recall last year despite pressure from consumer advocates and safety regulators.

"We believe that no board exercising reasonable judgment could leave Mr. Foley in charge of Peloton," and Foley "should have enough self-awareness and enough self-interest to resign as a director," Blackwells Capital insisted.

Some companies said to be eyeing Peloton are Apple, which already has a budding fitness business that so far lacks Peloton’s die-hard fanbase, while short-seller Citron Research is anxious to would marry Peloton and Blue Apron, the meal-kit delivery pioneer. A nutrition + fitness match made in late-capitalist heaven, CNN claimed.

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