Please ensure Javascript is enabled for purposes of website accessibility

Cathie Wood Continues to Stockpile Peloton Stock

By Danny Vena - Apr 23, 2021 at 2:02PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The red-hot ETF manager has added more than 300,000 shares so far this week, even in the face of negative headlines.

Peloton Interactive (PTON 13.60%) has been on Wall Street's radar in a big way, with 24 of 27 analysts who cover the stock rating it a buy or strong buy. Star money manager Cathie Wood, the founder and CEO of ARK Investment Management, has been buying up the stock hand over fist, adding another 313,000 shares this week alone. 

The ARK Next Generation Internet (ARKW 3.94%) exchange-traded fund (ETF) continues to build a large position in the interactive fitness products company. Including the shares purchased through Thursday, the fund has amassed more than 1.4 million shares, with a market value in excess of $142 million. That represents more than 2% of the ETF's $6.9 billion in funds under management. 

A Peloton Tread+ treadmill with a video screen showing a fitness instructor.

A Peloton Tread+ treadmill. Image source: Peloton.

This represents a big vote of confidence by Wood. Peloton has been under fire this week in the wake of a warning by the Consumer Product Safety Commission (CPSC) to stop using the company's $4,300 Tread+ fitness machine in the presence of pets and small children.

The CPSC issue the "urgent warning" last weekend after it identified dozens of incidents of children being pulled under the moving treadmill, resulting in one fatality. 

The government agency asked Peloton to voluntarily recall the device, which it says poses serious risks. This follows reports of children becoming "entrapped, pinned, and pulled under the rear roller of the product." The company has thus far declined the move, saying the product is safe when used as directed, with the safety key removed and stored out of reach of children. 

Peloton was one of the undisputed beneficiaries of the stay-at-home orders that accompanied the pandemic, as consumers sought ways to stay fit while under lockdown. As the premier provider of consumer fitness devices, Peloton saw its stock soar 434% last year.

The ongoing public dispute with the federal agency threatens to tarnish Peloton's image and could negatively impact the debut of its less expensive treadmill, scheduled to be released in the U.S. later this year.

Danny Vena owns shares of Peloton Interactive. The Motley Fool owns shares of and recommends Peloton Interactive. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Peloton Interactive, Inc. Stock Quote
Peloton Interactive, Inc.
PTON
$13.53 (13.60%) $1.62
ARK ETF Trust - ARK Next Generation Internet ETF Stock Quote
ARK ETF Trust - ARK Next Generation Internet ETF
ARKW
$63.88 (3.94%) $2.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.