Has Peloton found a second wind on the stock market? Will the departure of John Folley reinvigorate the value? Recently massacred, the specialist in high-end exercise bikes and treadmills, listed on Wall Street since 2019, rebounded 20.9% on Monday February 7, very close to 30 dollars, more or less its price of intro ($29).
The activist fund Blackwells Capital, at the head of 5% of the capital, won its case and revived, in passing, speculation on the file. He who claimed the head of the general manager of Peloton, at the origin, according to his analysis, of all the errors of course of the company, obtained that John Foley retires and becomes executive chairman. The information first circulated in the form of a rumour, relayed by the wall street journal, before being confirmed on Tuesday by the American giant. The question of his replacement does not arise, he has already been found: it is Barry McCarthy, the former financial director of the music streaming giant Spotify and Netflix, in the video. He will serve as CEO and join the board of directors.
Planed forecasts
This change in governance comes on the sidelines of the announcement of the results for the second quarter of the 2021-2022 financial year, ending on December 31. Unsurprisingly, the start-up was at a loss, penalized by the gradual return to normal life and the reopening of sports halls. But the deficit was bigger than expected. It hit $439.4 million, or $1.39 per share, from a profit of $63.6 million (18 cents per share) a year earlier. Turnover came out in line with expectations at 1.13 billion dollars, up about 6%. Revenue from the connected fitness division, which accounts for 70% of total activity, fell 8% to $796.4 million, while subscription revenue rose 73% to $337.5 million. million.
What next? It will be less dynamic than expected, warns Peloton. The forecast for the year has been revised downwards. Revenue is now expected to range from $3.7 billion to $3.8 billion, down from $4.4 billion to $4.8 billion previously, and the group is expected to end the year with around $3 million. subscribers connected to fitness, i.e. 350,000 to 450,000 less than expected.
Towards a sale?
” We are taking steps to better position Peloton for sustainable growth, while setting a clear path to continued profitability wrote John Foley in a letter to shareholders. The first of these measures was to remove him… Barry McCarhty, who takes over the controls, will have the heavy task of restructuring the group. Among the tracks mentioned: the elimination of 20% of the workforce, i.e. 2,800 jobs, the reduction of annual costs by 800 million dollars and the end of the development of the Peloton Output Park, a 400 million dollar factory that the group was building in the ‘Ohio. Barry McCarthy’s mission could go beyond that.
The Netflix alum may have to drive Peloton’s sale. Blackwells Capital calls for such a scenario. There is no shortage of candidates for a takeover, from Amazon to Apple, via Nike, Disney or a private equity player. ” ATMazon spoke with advisers about a potential deal “, indicated Friday the wall street journalciting sources familiar with the matter, stating that “ there is no guarantee that the e-commerce giant will follow up on an offer or that Peloton, which works with its own advisers, will be receptive “. If resale there is, it could be size. Despite its recent fall, the American group still has a market capitalization of 9.7 billion dollars.
PC