Peloton (NASDAQ:PTON) just can’t seem to stay out of the news. Today, PTON stock investors received additional updates from the embattled fitness company. For starters, Peloton released its quarterly earnings early, reporting revenue of $1.13 billion, up 6% year-over-year (YOY). However, this isn’t the news that’s on investors’ minds. Rather, it was announced this morning that CEO John Foley would be stepping down. After stepping down, Foley will become the executive chair on Peloton’s board of directors. Barry McCarthy, who previously served as the CFO of Spotify (NYSE:SPOT) and Netflix (NASDAQ:NFLX), will be taking Foley’s place, effective tomorrow. Let’s take a look at what investors should know regarding the CEO news and Peloton layoffs.
PTON Stock: CEO John Foley to Step Down
Foley’s departure as CEO shouldn’t be too much of a surprise. The at-home fitness company has been dealing with supply chain and reopening issues for quite some time now. Adding on to that, Blackwells Capital, an activist investor of Peloton, has been incessantly urging Peloton to replace its CEO and sell itself. Yesterday, Blackwells released a 65-page presentation that details how Peloton is an attractive investment, but has been misled by an incompetent management team. Making matters worse, Peloton announced this morning that it plans to lay off 2,800 employees, which includes about 20% of its corporate positions.
In his departure letter, Foley added that:
“This has been a humbling time for Peloton, but we remain confident in the fundamentals of our business, the strength of our platform, and the significant growth potential for Connected Fitness and our leadership position within it. The decisions we have made will make us a leaner and more nimble organization that is better able to execute against our sizable growth opportunity.”
Interestingly enough, shares of PTON stock are in the green today by more than 10%. It seems that amid all the negative news, investors may be anticipating a potential sale to a suitor. So, what else do you need to know about the fitness equipment provider?
What to Know Amid Peloton Layoffs 2022
- For the three months ended Dec. 31, Peloton reported a net loss of $439.4 million, down from a net income of $63.6 million YOY.
- In addition, Peloton cut its estimated fiscal 2022 revenue guidance to $3.7 billion to $3.8 billion. Previously, Peloton was expecting $4.4 billion to $4.8 billion.
- On the bright side, subscription revenue totaled $337.5 million, which was up an impressive 73% YOY.
- In 2021, Peloton’s shareholder return was 76%, which was the worst out of all companies in the Nasdaq 300.
- Blackwells believes Peloton’s poor performance can be explained by several factors. These factors include a lack of financial discipline, management qualifications and credibility.
- The activist firm lays out several potential buyers of Peloton, including Disney (NYSE:DIS), Lululemon (NASDAQ:LULU) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
- Despite this, Blackwells still believes Peloton is an “attractive business.” The firm highlights Peloton’s total addressable market (TAM), unique business model and high quality products.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.