The abrupt fall from grace of Peloton continues to exercise the minds of investors today as the former darling of the burgeoning home fitness sector comes to terms with a $35bn fall in market capitalization over the past two years.
Subject to a series of scandals the floundering firm has seen both Amazon and Nike circle as Peloton CEO John Foley jump ship after investors questioned his fitness to lead.
The trigger for the bout of handwringing was a brutal presentation authored by Blackwells Capital which will have made for grim reading for Foley, with the added humiliation of its contents being widely discussed and shared on social media.
How to lose $35 billion of market cap in less than 2 years
Peloton CEO John Foley is stepping down after investors voiced grave concerns in a presentation to the company
The wild part? The presentation is PUBLIC...and oh boy is it ugly for $PTON management
My breakdown ⬇️ pic.twitter.com/iyagiCi6Tz— Liam Killingstad (@LiamKillingstad) February 8, 2022
The hard-hitting report lays the blame for a catastrophic 76% decline in market value squarely on the shoulders of management who are held responsible for '... a series of execution errors' such as a lack of qualifications, poor decision making and a lack of credibility.
Questionable decisions include an extravagant 15-year lease for Manhattan office space which will cost the business $450m and Foley's decision to flog $100m of shares in 2021 while publicly proclaiming 'unbridled optimism' in his company.
As CEO Foley bears the brunt of criticism with anger centered on public comments attributed to an interview with Time magazine in which he admitted he was 'not a very good manager' and would go 'months' without speaking to Peloton's chief technology officer.
Titled a 'Call to Action' the report implores management to sell the business as it 'cannot achieve its potential' as a standalone enterprise, with potential named suitors including Meta, Disney and Adidas. Crucially Blackwells believe that Peloton could yet turn things around, noting strong fundamentals with 62m gym members in the US driven by convenience and cost, but that a continuance of the status quo risks driving the business into the ground.
It comes as former AirBnB luminary Jonathan Mildenhall joins Peloton's board of directors.