Peloton activist Blackwells Capital takes aim at new CEO, again pushes for sale

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A person walks past a Peloton store on January 20, 2022 in Coral Gables, Florida.
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Activist Blackwells Capital is reiterating its push for Peloton to consider a sale, arguing that the connected fitness company has made little to no progress under new Chief Executive Barry McCarthy, according to a new presentation seen by CNBC.

Peloton’s powerful brand, proprietary technology, engaging fitness instructors and loyal subscriber base can be shaped into a much more attractive business, argues Blackwells, which has a less than 5% stake in Peloton.

But, the firm said, change cannot happen effectively in the public markets, particularly as Peloton founder and former CEO John Foley maintains control of the company through his super-voting shares.

Peloton shares rose more than 3% in premarket trading.

This comes a little more than two months after Foley transitioned to executive chairman and McCarthy, a former Netflix and Spotify executive, took the helm of Peloton. The shake-up transpired as Peloton was seeing demand for its bikes and treadmills wane as costs mounted, weighing on profits. In February, Peloton announced plans to ax about 2,800 jobs and slash roughly $800 million in annual costs.

“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, chief investment officer of Blackwells, said in a statement. “Remarkably, shareholders are worse off now than before.”

Peloton didn’t immediately respond to CNBC’s request for comment.

The Financial Times first reported on the Blackwells presentation.

This story is developing. Please check back for updates.

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