This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Peloton Thriller Will Keep on Cycling
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Peloton Thriller Will Keep on Cycling
Markets

Peloton Thriller Will Keep on Cycling

Editorial Board Published February 8, 2022
Share
Peloton Thriller Will Keep on Cycling
SHARE

First Big, now Foley. The casualties of the Peloton Interactive PTON 25.28% drama are getting more real by the day. Don’t expect a happily ever after to come overnight.

Peloton co-founder John Foley is stepping down as chief executive and will become executive chair, the company said Tuesday morning. Succeeding him is former Spotify Technology and Netflix chief financial officer, Barry McCarthy, who also will join the company’s board. In conjunction with that announcement, the company reported financial results for the period ended Dec. 31 (hastily rescheduled from the afternoon) and issued guidance for the remainder of the year. Spoiler alert: They weren’t good.

Peloton has gone from comedic television to action-packed thriller seemingly overnight. In the past two years or so we had America’s pandemic darling next door introducing itself as a likable protagonist. Then came the ominous warning signs, ignored by said investor darling. The denouement initially looked bleak: As of Friday’s close, Peloton had shed more than 85% of its market value from last January’s peak as more recent results showed growth was beginning to slow.

Things now look even worse: On Tuesday, Peloton said its digital subscribers—a primary lead generation channel for its business—fell nearly 3% sequentially, worse than Wall Street’s estimates. While the company chalked that up to a free trial ending, guidance for connected fitness subscribers for the remainder of the year also came in below the expectations. All told, for the year ending June 30, 2022, Peloton’s revenue forecast came in nearly 9% below what Wall Street was modeling.

Peloton also said Tuesday that it was starting a major cost-cutting initiative in an effort to take its business from a growth phase to one of consistent profitability. To do this, the company said it expects to achieve at least $800 million in annual run-rate cost savings and will reduce planned capital expenditures in 2022 by about $150 million. It plans to cut about 20% of its corporate head count.

Could there be further plot twists? On Friday, reports from The Wall Street Journal and the Financial Times that potential suitors such as Amazon.com and Nike were circling Peloton had fans believing quick and easy redemption could be right around the corner. Wall Street analysts went wild over the weekend, weighing in on every conceivable suitor and respective rationale. Peloton’s shares rose more than 20% Monday on the deal speculation, but much of this might have been short covering. As of mid-January, FactSet shows Peloton’s short interest was 12% of its free float.

Already have a bike? WSJ’s Nicole Nguyen shows you the gear and software you need to turn it into an internet-connected stationary cycle in a few simple steps. Photo Illustration by Dom Amatore for The Wall Street Journal; Photo: Zwift

At this point, a subscription to the Peloton drama might be a better investment than the stock itself. Mr. Foley said in an interview with the Journal that the company is open to exploring any opportunity that could create value for shareholders—important as Peloton is a controlled company and therefore would need the buy-in of Mr. Foley and other insiders to sell itself. But a management change—and the appointment of subscription dynamo Mr. McCarthy in particular—coupled with a clear cost-cutting plan seem to indicate Peloton is focused on executing an independent future.

It will have its work cut out for it. Peloton said on Tuesday’s earnings call that its updated guidance was based on extrapolating trends seen in the first half of its fiscal year. Positively, it is clear that Peloton’s future is as a subscription business. Its loyal connected fitness subscribers are unequivocally Peloton’s most attractive asset to any would-be buyer. The company also said Tuesday that it is winding down a domestic manufacturing build-out, admitting it overinvested in certain areas. That is an understatement: BMO analyst Simeon Siegel said in a note Tuesday Peloton’s estimated annual cost savings boil down to about the amount it grew labor, technology and acquisition expenses since Covid-19.

For anyone still hoping for a near-term buyout, it is important to note that neither the Journal nor the Financial Times reported any suitor has had actual talks with Peloton, suggesting the reported interest was still in the very early stages.

To get saved, Peloton first needs to show it can save itself.

Peloton’s Pandemic Rise and Fall

Write to Laura Forman at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the February 9, 2022, print edition as ‘Peloton’s Thriller Will Keep on Cycling.’

TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Housecleaning of Washington’s partisan bureaucracy emerges as top priority for House Freedom Caucus Housecleaning of Washington’s partisan bureaucracy emerges as top priority for House Freedom Caucus
Next Article Ukraine’s Zelensky Wants to Fend Off Russia—and America, Too Ukraine’s Zelensky Wants to Fend Off Russia—and America, Too

Editor's Pick

Mandy Moore ‘Unrecognizable’ to Followers After Debuting New Face

Mandy Moore ‘Unrecognizable’ to Followers After Debuting New Face

Studying Time: 4 minutes Mandy Moore has followers scratching their heads. This isn’t about her GoFundMe controversy earlier this 12…

By Editorial Board 6 Min Read
Seniiors Unveils AI-Enhanced Senior-Care Platform Amid Rapidly Growing AgeTech Market
Seniiors Unveils AI-Enhanced Senior-Care Platform Amid Rapidly Growing AgeTech Market

Reinforcing Seniiors’ leadership in digital senior care with data-driven automation and deep…

5 Min Read
Gear Information of the Week: Intel’s New Chips Arrive, and Apple Might Debut iPads and MacBooks This Month
Gear Information of the Week: Intel’s New Chips Arrive, and Apple Might Debut iPads and MacBooks This Month

Intel's future has by no means appeared so unsure. However a lot…

5 Min Read

Oponion

Musk factors finger at everybody however himself for main web site outage

Musk factors finger at everybody however himself for main web site outage

Elon Musk’s social media platform crashed on Monday, nevertheless it’s…

March 10, 2025

Serena Williams Pregnant?! Every little thing to Know About Her Household

Studying Time: 3 minutes Is Serena…

April 12, 2025

Officers: Soldier died by gunshot earlier than Cybertruck exploded in Las Vegas

The extremely embellished Military soldier inside…

January 3, 2025

Miss Manners: Does my condiment behavior warrant these darkish appears to be like?

DEAR MISS MANNERS: I usually have…

August 14, 2025

Harriette Cole: Why ought to the bride’s buddy must scrimp for months?

DEAR HARRIETTE: The recommendation you gave…

October 7, 2024

You Might Also Like

Nestle to chop 16,000 jobs as a part of value financial savings initiative
Markets

Nestle to chop 16,000 jobs as a part of value financial savings initiative

HHS Secretary Robert F. Kennedy Jr. discusses efforts to section out petroleum-based artificial dyes within the nation's meals provide on…

4 Min Read
GM takes .6B monetary hit as EV tax credit score adjustments power technique overhaul
Markets

GM takes $1.6B monetary hit as EV tax credit score adjustments power technique overhaul

Energy the Future founder Daniel Turner discusses the Trump administration suing California over its truck emissions requirements and EV mandates…

4 Min Read
ETF race hits T at document velocity
Markets

ETF race hits $1T at document velocity

Traders are plowing cash right into a broad swath of belongings placing the ETF trade within the driver’s seat of…

5 Min Read
JPMorgan lifts curiosity earnings forecast after revenue beats estimates
Markets

JPMorgan lifts curiosity earnings forecast after revenue beats estimates

Catalyst Capital Advisors co-founder and CIO David Miller dissects 'highly effective earnings progress' and extra as markets rally on easing commerce…

6 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?