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PTON Stock Climbs 32% and Closes 25% Up on Tuesday as Peloton Announces New CEO 

UTC by Ibukun Ogundare · 3 min read
PTON Stock Climbs 32% and Closes 25% Up on Tuesday as Peloton Announces New CEO 
Photo: Peloton

Even with a new CEO, Peloton now anticipates seeing 3 million connected fitness subscribers, down from an earlier projection of the range from 3.35 million to 3.45 million.

Shares of exercise equipment manufacturer Peloton Interactive Inc (NASDAQ PTON) surged over 32% on news that the company would be replacing its CEO, John Foley. In addition to removing Foley as CEO, the fitness company also announced that it would be cutting about 20% of corporate positions, equaling 2,800 jobs. Yesterday it closed with a 25% gain. At the time of writing, Peloton is trading at $38.65, a 3.70% close over its previous close of $37.27. The company has recorded a combination of profits and losses over the past year. In the last twelve months, Peloton has declined nearly 75% and dropped 25.65% over the past three months. However, PTON has gained more than 4% in its year-to-date record and almost 2% over the past month.

On the 7th of February, Peloton climbed 43% in extended trading hours shortly after an activist investor Blackwells Capital encouraged the Peloton board to consider selling off the company. At the time, Capital suggested Apple Inc (NASDAQ: APPL), the Walt Disney Company (NYSE: DIS), and other potential buyers. However, reports showed that Nike Inc (NYSE: NKE) and e-commerce giant Amazon.com Inc (NASDAQ: AMZN) are exploring bids for the fitness company.

Now, it appears Peloton keeps having reasons to pull in increases. Despite the cutting off of jobs and its slashed financial outlook for 2022, the company has soared 33.01% in the last five days. Previously, the company predicted that its fiscal 022 revenue would fall within the range of $4.4 billion and $4.8 billion. However, the fitness company is now expecting revenue to be between $3.7 billion and $3.8 billion.

Peloton Announces New CEO

Peloton announced that Barry McCarthy would join the Peloton board and become the new CEO and president. McCarthy formerly served as the chief financial officer at Spotify Technology SA (NYSE: SPOT) and Netflix Inc (NASDAQ: NFLX). Currently, the former CFO is on the board of delivery startup Instacart. When McCarthy assumes the new position at Peloton, Foley will then become the board’s executive chairman.

In the announcement, Foley, the founder of Peloton, talked about how the company has developed over the years. Founded in 2012, the exercise equipment maker now has a “loyal community of more than 6.6 million members.” Foley said:

“I’m incredibly proud to have wired with such talented teammates over the years who have helped me build Peloton into what it is today, and I’m confident that Barry is the right leader to take the company into its next phase of growth.”

Even with a new CEO, Peloton now anticipates seeing 3 million connected fitness subscribers, down from an earlier projection of the range from 3.35 million to 3.45 million. Also, the company is slashing its annual costs and winding down its Peloton Output Park in Ohio. In a separate letter to investors. Foley stated:

“The decisions we have made will make us a leaner and more nimble organization that is better able to execute against our sizable growth opportunity.”

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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