Shares of Peloton Interactive (PTON 0.34%) were down 9.6% as of 1:20 p.m. ET on Tuesday. There was a lot of news from Peloton today, in addition to more bad news on the economy that sent just about everything down today. For context, the S&P 500 index was down 3% at the time of writing.
In a surprise turn of events, Peloton accepted the resignations of the company's two co-founders, Executive Chair John Foley, who previously served as CEO, and Chief Legal Officer Hisao Kushi. This comes on top of other news that Peloton is expanding the Bike rental program across the U.S., which could go a long way to expand the addressable market for its products.
Year to date, Peloton stock has fallen 72%.
Foley guided the company's early growth from its founding in 2012 up through the pandemic. He transitioned to Executive Chair earlier this year following the company's weak sales performance last year, as people returned to their pre-pandemic workout routines.
Previous management took swift action to expand manufacturing capacity just as demand was peaking during the pandemic. Over the last year, excess inventory and lower demand has caused massive losses on the bottom line, which new CEO Barry McCarthy stepped in to fix in February.
The resignations of the founders means that McCarthy has a clear path to run Peloton according to his vision, which involves balancing revenue growth with profitability and expanding the addressable market for the product with new products and services. On that note, the company's new Bike rental program could play a big role and fits McCarthy's previous experience serving in executive roles at subscription-based businesses like Spotify and Netflix.
While the news around Peloton today could be seen as positive, there still remains uncertainty about the size of the market for Peloton's products in a post-pandemic world.