Blackwells Capital — which holds less than a 5% stake in the fitness company — claims John Foley misled investors.
Peloton Interactive's troubles now include calls from an activist investor that the company oust co-founder and CEO John Foley and start looking for a possible buyer in the wake of a massive stock price drop over the past year.
The seller of home-fitness equipment would be an attractive target for a large technology or sportswear company like Apple or Nike, according to Blackwells Capital, which holds less than a 5% stake in Peloton. Foley's failures include"misleading Peloton investors that the company did not need additional capital, just weeks before issuing $1 billion of equity," Blackwells Capital stated Monday in ato Peloton's board of directors. Foley being"reluctant to work with the Consumer Product Safety Commission" over a recall of its treadmills was listed as another misstep.
"We believe that no board exercising reasonable judgment could leave Mr. Foley in charge of Peloton," wrote Jason Aintabi, chief investment officer at Blackwells.Aintabi could well be waging an uphill battle, as Foley and other insiders yielded control of more than 80% of Peloton's voting power as of Sept. 30, according to a proxyShares of Peloton were up more than 5% in early trade Monday.
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