Activist investor Blackwells Capital is suggesting a straightforward move to fire Peloton CEO John Foley amid declining share prices, according to an anonymous person who knows the company's plan.
The company also wants the exercise equipment firm to venture sales because of its "weak" stance in the market as of the moment.
Blackwells Capital Pushes Firing of Peloton CEO
SAN FRANCISCO, CA - SEPTEMBER 06: Peloton Co-Founder/CEO John Foley speaks onstage during Day 2 of TechCrunch Disrupt SF 2018 at Moscone Center on September 6, 2018 in San Francisco, California.
According to a report by CNBC, the investment manager wants to pursue firing Peloton's chief executive officer. It also suggested that the New York-based firm was a potential "acquisition target" for bigger companies that cater to health and fitness services.
An unknown person who is familiar with the matter said that Peloton's market stance is "weaker" in its current state than before the COVID-19 pandemic hit.
In addition, the anonymous individual who chose to be unnamed for privacy reasons said that this will put Foley into the hot seat and put the blame on the CEO.
Foley and the other shareholders were granted more than 80% of Peloton's voting power, suggesting that they have super-voting class B shares as of September 30, 2021, the proxy filing indicates.
This would also ensure that the entrusted shareholders are responsible for any huge changes that the company might agree with.
Last week, another report shared that Peloton was surveying any possible places to lessen its costs. As a result, the company decided to negotiate with McKinsey & Co., the biggest "Big Three" management consultancy in the world.
Related Article: Peloton Blames Apple's App Tracking Transparency for Losing New Subscribers
Peloton CEO on Halting Equipment Production
On Thursday, Jan. 20, CNBC wrote that Peloton has plans to pause bike and treadmill production for some time following its continuous share plunge, which hit over 20%.
In another report by The New York Post, Foley said that this was not true and denied that the company was stopping the current production of the fitness equipment. He clarified that the firm must attain the "right-size" for its inventory.
During that report, the company said that it reached $1.14 billion for its preliminary 2nd quarter revenue. It managed to reach 2.77 million subscribers at the end of the quarter.
"We are taking significant corrective actions to improve our profitability outlook and optimize our costs across the company," Foley said.
Why SEC Investigated Peloton in the Past
Last year, Tech Times reported that the Securities and Exchage Commission (SEC), among others, launched an investigation against Peloton which was accused of its questionable technologies.
At that time, the fitness-focused firm was reportedly creating equipment that could cause physical harm and injuries. Before that happened, Peloton was already under fire because of the same issue.
According to the probe, these concerns were not publicly published by the company. To add, it was also undergoing poor financial management which was believed to cause public distrust regarding their technology.
Meanwhile, we also reported that Amazon "illegally" fired Daequan Smith due to a worker unionization attempt.
Read Also: Peloton Under Investigation Due to Several Injuries Involving its Equipment
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Written by Joseph Henry
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Peloton Reveals SEC Probe, Investigations that Question the Safety and Injuries of their Exercise Equipment
Amazon Illegally Fires Daequan Smith Because of Worker Unionization Attempt, Says US National Labor Board
