The manufacturer of exercise bikes, Peloton, noticed a drop in shares after a period of high demand at the beginning of the pandemic.
Photo:
Jeenah Moon / Bloomberg News
Peloton Interactive Inc.
PTON 4.23%
is investigating the sale of a significant minority stake, in a bid to bolster its business as shares of the once-hot bike maker continue to sink.
The fitness company is targeting potential investors, including industry players and private companies that could take a stake of about 15% to 20%, according to people familiar with the issue. Discussions are at an early stage and there is no guarantee that the New York-based company will find a buyer or agree to a deal.
New capital could spur Peloton as he tries to make a big turnaround. It could also serve as a voice of trust if it comes from an established private company or technology giant such as Amazon.com Inc.,
who is among the suitors who investigated the complete purchase of Peloton, previously published by the Wall Street Journal.
Peloton enjoyed the good times as a favorite of the pandemic, with customers at home ordering his exercise equipment and streaming virtual lessons. Her appreciation has risen. But the company’s wealth fell as the blockades eased and gyms began to fill up again.
The value of Peloton fell from a high of 50 billion dollars at the beginning of last year to about 5.6 billion dollars this week. Shares lost about 9% on Thursday due to a wider market decline.
Peloton was mad, announcing that his CEO was resigning and that thousands of jobs would be laid off, despite the increase in sales at the beginning of the pandemic. This is why Peloton became a viral success and why it is appearing now. Photo illustration: Jacob Reinolds
The company fired its CEO in early February and unveiled plans to lay off 2,800 jobs in a bid to boost its estimate, which was about $ 8 billion at the time. But its shares have since continued to fall amid a drop in technology inventories that has not spared even highly profitable companies such as Facebook’s parent Meta Platforms Inc.
Peloton co-founder John Foley, who ran the company during its ten-year existence, was succeeded by Barry McCarthy, former CFO of Spotify Technology. on the
and Netflix Inc.
The company then said it was canceling plans for a $ 400 million factory in Ohio, cutting its guidelines for a full fiscal year and making changes to its board.
The changes came a few weeks after investor activist Blackwells Capital LLC called on Peloton to fire Mr. Foley and investigate the sale.
G. McCarthy said he plans to cut costs and create a company that is more focused on digital presence and less reliant on selling exercise equipment. Subscription-based business models tend to generate more value on Wall Street than manufacturers, and Mr. McCarthy said he thinks he can implement strategies that worked at Netflix and Spotify on Peloton.
To write Cara Lombardo at [email protected] and Dana Cimilluca at [email protected]
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He appeared in the print edition of May 6, 2022, as “Peloton wants to sell a significant minority stake.”