New Peloton Chief Spins A Growth Plan Amidst Declining Value

Despite on-again, off-again rumors that Peloton Interactive Inc. may be for sale, the home fitness brand’s new CEO said the company is ready to grow.

“It’s the vote of the shareholders, and I’m confident a large percentage of the votes will be cast in favor of my leadership of the business,” Barry McCarthy told The Financial Times. The former finance chief for Spotify and Netflix said Peloton will double its on-demand content offerings, add products, and expand into new companies.

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The company, which markets stationary bikes, treadmills, and classes, saw its business skyrocket during the height of the pandemic, when customers sought at-home exercise equipment and instruction. As people returned to gyms and supply chain issues mounted, delaying equipment deliveries, profits declined. A product recall didn’t help.

When buyout talk surfaced in late 2021, the company’s market value plunged as much as 80% in the last quarter, some analysts report. Still, some investment firms bought new shares or expanded their existing positions. Durable Capital Partners, for example, purchased 5.4 million shares. Eminence Capital bought 2.6 million shares, and Sachem Head Management Capital, 1.6 million, according to recent 13-F regulatory filings. Additionally, Soros Management took a $13.3 million dollar stake in the company.

Other investors, naturally, sold off shares. Altimeter Capital relinquished 5.6 million, and Coatue Management, 3.7 million.

Though the share price remains low, McCarthy said he is concentrating on building Peloton rather than preparing it for a sale, according to The Financial Times. Meanwhile, the once red-hot darling has cut 2,800 corporate, warehouse, and delivery positions globally, retaining instructors. It has also abandoned plans to build a factory in Ohio.