(Bloomberg) — Peloton Interactive Inc. Chief Executive Officer John Foley will step down and become executive chair, the Wall Street Journal reported, citing the company.
The maker of exercise bikes that became a hot property during the pandemic will now shed about 2,800 jobs, affecting around 20% of corporate positions, the paper reported. Barry McCarthy, former chief financial officer at Spotify Technology SA, will become CEO and president.
Peloton’s shares have tumbled more than 80% from their all-time high a year ago, as the gradual easing of pandemic-era restrictions fueled concern that growth of the stay-home fitness company will slow. The stock soared 31% on Monday after reports that it’s exploring takeover options.
Peloton shares fluctuated between gains and losses in premarket trading following the WSJ report, and were down 4.3% to $28.48 apiece at 5:22 a.m. New York time.
A company spokesman didn’t immediately reply to an email from Bloomberg News seeking comment.
Blackwells Capital LLC, which has a stake of less than 5%, has called for Foley’s resignation and wants Peloton to explore a sale of the business. It decried the CEO’s leadership, citing failed forecasting and inconsistent strategy, and governance problems such as a lack of financial controls. It also said Foley misled investors by saying that the company didn’t need more capital, weeks before a $1 billion stock offering.
Foley, a former Barnes & Noble Inc. e-commerce executive and cycling enthusiast, founded the company after posting a video to Kickstarter in 2013. At the of the end of last week, Peloton was valued at just over $8 billion, based on Friday’s official market close of $24.60 a share. That’s below its September 2019 initial public offering price of $29 a share.
(Updates with additional context)
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