Activist investor rounds on new Peloton chief for lack of reform
The activist investor that moved to oust former Peloton boss John Foley has now rounded on its new chief, claiming he has failed to reform the company’s governance and has not made a credible case for it to remain independent.
Blackwell’s Capital, which holds a five per cent stake in the home fitness firm, says Barry McCarthy taking over the top job had done little to resolve the issues it attacked the firm for earlier this year.
The investor has now laid out a series of calls for reform to bosses in a presentation seen by City PM
“Peloton’s recent leadership transition has not resulted in any meaningful changes or created value for shareholders,” the firm said.
“Poor corporate governance and management’s lack of credibility continue to depress the share price.”
Blackwells has been agitating for a sale of the firm to a major tech or sports firm, with Nike, Amazon and Netflix all touted as potential buyers in the presentation.
“An acquirer would be able to realise significant cost synergies and better utilise Peloton’s latent pricing power,” it said.
Blackwells is also now pushing for a management shakeup, writing that CFO Jill Woodworth should not be permitted to continue in her role after revising her forward guidance downwards in each of the last five quarters.
The appointment of Peloton’s new Chief Supply Chain Officer raises “a number of questions”, Peloton said, citing a line in his announcement statement that indicated he would take on the role part time.
Peloton’s governance and supply woes were brought into sharp focus earlier this year when it was revealed that the firm had been forced to slash production of its bikes as demand plunged.
The bikes had boomed in popularity through the pandemic but have fallen out of favour as covid restrictions have been lifted, and shares in the firm have plunged over 70 per cent in the past six months.
Blackwell’s claimed that Peloton was saddled with inefficiencies as a result of a “misguided attempt at ‘blitzscaling’” during the pandemic.