In a development that few investors likely expected, Peloton Interactive (NASDAQ:PTON) co-founders John Foley and Hisao Kushi have officially stepped down from their positions at the company. In addition, Peloton’s chief commercial officer is quitting. Consequently, today’s trading volume and selling pressure are unusually high with PTON stock.
It wasn’t long ago that Peloton reported a $1.2 billion quarterly net earnings loss along with a revenue decline of almost 30%. The last thing that Peloton’s loyal investors needed yesterday was a negative shock. Yet, that’s exactly what they got as Peloton disclosed an exodus of multiple C-suite executives.
The official press release called it a “restructuring,” but that’s a polite way of calling it a major shakeup. Kevin Cornils, the company’s chief commercial officer, is quitting. However, that’s not even the worst of it.
As it turns out, two of Peloton’s co-founders are exiting. One of them is Kushi, who also served as Peloton’s legal chief. Perhaps most shocking of all, though, is that Foley is leaving. He already stepped down from the company’s CEO role but stayed on as executive chairman of the board.
What’s Happening With PTON Stock?
As you might expect, PTON stock gapped down 9% upon the opening of the market today and stayed firmly in the red. This is crucial as it puts the share price right at the key $10 level. It’s also worth noting that nearly 10 million Peloton shares traded hands by 10:30 a.m. Eastern.
Peloton, a home fitness equipment maker, was briefly a darling of the market due to the Covid-19 lockdowns of 2020. It’s astounding to consider that Peloton shares have tumbled from $160 to $10.
Karen Boone, who joined Peloton’s board in 2019, will take Foley’s position as the company’s executive chair. Still, it’s apparent that investors don’t want to see Foley leave the company like this. He’s been the face of the company for the better part of a decade.
Peloton’s shareholders, if they don’t sell today, will have to adapt to some new faces in key positions at the company. It’s a process that will require some time, and possibly further share-price decline.
On the date of publication, David Moadel did not have (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.