Peloton Searches For Investors As Stock Sinks
Peloton is searching for potential investors willing to buy 15-20 per cent of the fast flagging company.
The Wall Street Journal reports the fitness company has been meeting with industry players and private equity firms, although it stresses that discussions remain at an early stage.
Peloton saw its fortunes rise during the pandemic, as at-home workout came into vogue. Since hitting a market valuation high of roughly US$50 billion early last year, the company has dramatically fallen in favour, being currently valued at around US$5.6 billion.
In February, founder and CEO John Foley announced he would be stepping down, as the company axed more than 2,800 workers to cut costs, and cancelled plans to build a US$400 million factory in Ohio.
Last month, investor Blackwells Capital made a presentation urging the company to sell, and criticising the continued involvement of ousted founder and ex-CEO John Foley.
“Peloton will continue to be poorly valued for as long as a close-knit group of insiders, who have proven themselves incapable of creating value, continue to wield voting power far in excess of their economic interest,” Blackwells Chief Investment Officer Jason Aintabi said.
“No shareholder should want Mr. Foley to still sit atop the management pyramid or control the board through his super voting-stock.
“He lost his entitlement to both positions when he destroyed $40 billion of shareholder wealth in less than a year.”