New Boss 💪

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New Boss

Lately, there has been a lot of news surrounding the luxury fitness equipment company, Peloton. Shares soared this week on rumors that the company would be acquired by Amazon or Nike. It’s important to note that neither of these companies have expressed interest in acquiring Peloton–this is pure speculation. On Tuesday, Peloton’s stock kept soaring after the company announced a new CEO.

The founder of Peloton, John Foley, is stepping down as CEO and will become executive chairman of the board. Barry McCarthy, the former CFO of Spotify and Netflix, will become the new CEO of Peloton. McCarthy will also become the president and join Peloton’s board.

John Foley is confident in McCarthy’s ability to run the company successfully. McCarthy’s past expertise managing subscription business models and digital streaming firms Spotify and Netflix makes Foley confident he can do the job.

In addition to naming a new CEO, Peloton also announced it is cutting 20% of its workforce or about 2800 jobs. Peloton is hoping that the layoffs and other cost-cutting measures will increase profitability after demand for its workout equipment declined substantially, making the company a target for acquisition. The company’s valuation plummeted from $50 billion to about $8 billion last week, sparking acquisition rumors.

In response to rumors that the firm was for sale, Foley said, “We are open to exploring any opportunity that could create value for Peloton shareholders.” Foley holds 80% of Peloton’s voting power, so any deal would need his approval.

What do you think about the Peloton news? Do you think Peloton’s latest moves will increase the company’s value in the future?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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