What happened
Shares of connected fitness equipment maker Peloton Interactive (PTON -0.98%) were falling 5.9% at 10:45 a.m. ET Wednesday after the activist investor pushing for the company to be sold reportedly said it doesn't see much change happening despite the executive suite shake-up.
Image source: Getty Images.
So what
Peloton's business cratered after the company badly misjudged the impact consumers going back to the gym would have.
Sales are only inching forward, full-year losses are expected to be much wider than what Wall Street was anticipating, and the company resorted to mass firings to save money, something it had previously said would be done only as a last resort.
Activist investor Blackwells Capital called for CEO John Foley to be fired, the board to be shaken up, and the company to be sold. It suggested retail outfits like Nike or Apple are the kinds of companies that would be interested in buying Peloton, though there was no indication they are actually interested at all in buying. Foley, the company's founder, stepped down as CEO and assumed the role of executive chairman.
Now what
The new CEO who was brought in, former Netflix and Spotify executive Barry McCarthy, quickly doused those hopes for a sale, telling the Financial Times, "There are lots of other things I could be doing with my time that are quite lucrative than hanging out with a business that's about to be sold."
Blackwells Capital apparently doesn't think the C-suite shuffle will change the company. Foley still owns a supermajority of voting shares and would have to sign off on a sale while the board remains beholden to him.
The reminder that Peloton Interactive is going to be stuck in this holding pattern apparently is causing its stock to sink.
