If activist investor Blackwells Capital has its way, Peloton would fire its chief executive John Foley and look at a sale, The Wall Street Journal (WSJ) reported Sunday (Jan. 23).
Blackwells has under 5% stake in Peloton, and the investor is prepared to push for the firing of Foley, unnamed sources told the WSJ.
This comes as the stationary-bike maker’s stock has fallen over 80% from its all-time high. It is currently trading below its September 2019 initial public offering (IPO) price.
The pandemic had seen Peloton doing very well for itself while everyone was stuck inside due to quarantine precautions, and Blackwells reportedly thinks Peloton might be a good target for a buy for a larger tech or fitness company.
The company also saw its shares falling 24% Thursday (Jan. 20) after a CNBC report said the company was halting production of its products due to the rising demand.
In a letter to employees, Foley said the company had been looking at the size of its workforce, resetting production levels while the company adapts to “more seasonal demand” for its products.
In a statement, Foley also added that the company was looking at big corrective actions to bolster its profitability outlook.
The WSJ report goes on to say Peloton had said on its website that it planned to start charging customers for delivery fees and setup charges for its products — which might come out to hundreds of dollars.
PYMNTS recently wrote that Peloton has struck back against reports about the halting of its fitness products, and Foley reportedly said it was “moving forward” to legislate against those who leaked that information to CNBC.
Read more: Peloton Pushes Back on Bike Production Halt Report, Plans to Sue Leaker
CNBC had reportedly accessed internal documents by reporting Peloton’s intent to halt production of bikes for the next few months.
The news helped trigger an aforementioned 24% drop in the company stock price; however, the company said the information was “incomplete, out of context, and not reflective of Peloton’s strategy,” according to Foley.
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