Investor Blackwells Capital Renews Push for Peloton Sale


Activist investor Blackwells Capital has renewed its calls for Peloton to put itself up for sale, claiming the connected fitness brand continues to flounder under new CEO Barry McCarthy.

As CNBC reported Wednesday (April 13), Blackwells — which owns less than 5% of Peloton — argues the company’s brand, technology, and subscriber base can be molded into a more appealing business.

However, Blackwells also says that transformation can’t happen in the public markets, especially with Peloton founder and ex-CEO John Foley controlling the company with his super-voting shares.

See also: Report: Peloton Activist Investor Plans Push to Fire CEO, Seek Sale

Blackwells had pushed for Foley to be removed from his position earlier this year. He was removed from office in February and replaced with McCarthy, former CFO at Spotify.

“I have always thought there has to be a better CEO for Peloton than me,” Foley said at the time in an interview with the Wall Street Journal. “Barry is more perfectly suited than anybody I could’ve imagined.”

Soon after taking office, McCarthy dismissed the notion that the company should be put up for sale, saying he was focused on helping Peloton grow.

Learn more: New Peloton CEO: No Plans to Sell Floundering Connected Health Brand

“If I thought it was likely that the business was going to be acquired in the foreseeable future, I can’t imagine it would be a rational act to move across the country,” he said in February. “There are lots of other things I could be doing with my time that are quite lucrative than hanging out with a business that’s about to be sold.”

This shakeup happened as Peloton was seeing waning demand for its treadmills and bikes as costs rose and ate away at profits. The company announced plans to cut about 2,800 jobs along with $800 million in annual costs.

See also: Peloton Co-Founder Foley Replaced as CEO by Ex Spotify CFO

But for Blackwells, it hasn’t been enough.

“Two months have passed since John Foley was promoted into the role of Executive Chairman and Barry McCarthy came out of retirement to assume the post of CEO,” Jason Aintabi, Blackwells’ chief investment officer, said in a statement, per CNBC. “Remarkably, shareholders are worse off now than before.”