Peloton Interactive Inc is set to face calls from an activist investor to fire its CEO and pursue a sale, a person with knowledge of the matter said.
Blackwells Capital LLC, which has a stake of less than 5 percent, is preparing to push Peloton to fire CEO and co-founder John Foley, the person said, asking not to be identified as the information is private.
The investor also wants Peloton to explore a sale of the business, which could be an attractive acquisition target for larger technology or fitness firms, the source said.
A representative for Peloton did not immediately respond to a request for comment on Blackwells’ proposals, which were earlier reported by the Wall Street Journal.
Peloton’s shares have tumbled more than 80 percent from an all-time high one year ago, as the gradual easing of pandemic-era restrictions fueled concern that growth of the home-fitness company might slow.
The stock touched a nearly two-year low last week after CNBC reported that Peloton was temporarily halting production of its bikes and treadmills. Its quarterly earnings also missed analysts’ estimates.
While Peloton has recently hired McKinsey & Co to evaluate its business and costs, it is unclear if a potential sale is being considered or if Blackwells would succeed in ousting Foley.
The former Barnes & Noble Inc e-commerce executive and cycling enthusiast founded the company after posting a video to Kickstarter in 2013. The CEO and other insiders control over 80 percent of Peloton’s voting power as of Sept. 30, the Wall Street Journal said in its report.
Peloton, which has slashed its annual forecast by about US$1 billion, last week posted lower-than-expected revenue of US$1.14 billion for the quarter ending last month. Foley said in a statement that the company is taking steps to improve its profitability outlook and optimize costs, pledging to provide more information on its cost-cutting plan when Peloton gives its formal earnings report on Feb. 8.
The company’s public image also took a hit last month, when HBO Max’s Sex and the City reboot killed off a character who used Peloton equipment.
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