In this video, I will be talking about the current state of Peloton (PTON 3.46%). The company reported second-quarter earnings and the CEO is stepping down, to be replaced by Barry McCarthy, who previously worked at Spotify and Netflix. Whether he joins for the comeback story or for the fixer-upper and sell remains to be seen. You can find the video below, but here are some highlights.
- The company announced a comprehensive program to reduce costs and drive growth, and expects to deliver at least $800 million in annual run-rate cost savings.
- CEO John Foley will be replaced by ex-Netflix CFO Barry McCarthy. Many speculate that this is a quick fix to put the company up for sale.
- Connected fitness subscriptions grew 66% to 2.77 million and paid digital subscriptions grew 38% to 862,000. The company expects to end the fiscal year with approximately 3 million connected fitness subscriptions. It's important to note that before the pandemic started, it had around 700,000.
- Revenue for the quarter grew 6% to $1.13 billion while revenue guidance for the full year has been reduced to $3.7 billion at the midpoint, down from $4.6 billion.
- Blackwells Capital released a presentation calling for action at Peloton. The investment management firm is a significant shareholder of Peloton and has criticized the company's management and inability to lead, demanding that the board examine a sale of the company.
- Rumors of Amazon, Apple, and Nike being interested in acquiring Peloton have emerged recently. Peloton is a premium brand with a loyal customer base that will add tremendous value to whatever company may acquire it.
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*Stock prices used were the closing prices of Feb. 9, 2022. The video was published on Feb. 10, 2022.