Peloton chief to step down after activist campaign

Peloton’s co-founder and chief executive is stepping down as the value of the fitness bike maker has tumbled in the wake of an activist investor campaign to clear out its directors.

Barry McCarthy, the former chief financial officer of Spotify and Netflix, will replace John Foley as chief executive and president and join Peloton’s board, the Wall Street Journal said on Tuesday.

Foley, who has led the company since its foundation a decade ago, will become executive chair, the Journal added.

Blackwells Capital, which has a stake of nearly 5 per cent in Peloton, sent a 65-page presentation to the company’s board ahead of Tuesday’s earnings announcement.

It argued that Peloton had been “grossly mismanaged”, citing the collapse of the shares last year after the stock rode a surge of new orders in the first year of the pandemic.

“We believe the board should immediately begin to search for new, fully independent directors with no prior ties to the current board and management team,” Blackwells said.

The analysis followed Blackwells’ critique of Peloton’s governance a fortnight ago when the investor went public with its concerns and accused insiders of enriching themselves by selling more than $700mn of stock since its initial public offering in September 2019 as its market value has plunged.

The investor said it had formally demanded to inspect Peloton’s books and records to investigate the conduct of the company’s board and management.

Peloton did not immediately respond to a request for comment.