Published - September 13, 2022 @ 3:00 PM (EET)
On Monday, Peloton Interactive (NASDAQ:PTON) announced it has accepted the resignation of co-founder and former CEO John Foley, in a management shake-up as the maker of connected exercise equipment races to turn itself around.
The departure of Foley, effective immediately, will be joined by fellow co-founder and Chief Legal Officer Hisao Kushi, effective 3 October, the company said.
Foley, who helped start the company in 2012 and served as chief executive for ten years, took the executive chairman role in February when he handed the reins to former Spotify CEO Barry McCarthy.
Kushi will be replaced by former Uber Chief Deputy Counsel Tammy Albarrán, while Karen Boone will take the lead of Board Chair.
Responding to the resignations, Boone said Monday evening,
"We are immensely grateful to John and Hisao for having the vision, ambition, and commitment to turn Peloton into the iconic consumer brand it is today."
Though Peloton investors initially welcomed the changes, with shares climbing 5.3%, the stock rally Monday soon disappeared, with the stock declining over 2%.
WHY IT MATTERS
The management shake-up comes weeks after Peloton reported a quarterly loss of $1.2 billion and a nearly 30% drop in revenue. Earlier in August, Mr. McCarthy warned investors that it would probably spend more money than it brings in for another couple of months.
Foley co-founded Peloton alongside Graham Stanton, Hisao Kushi, Yony Feng, and Tom Cortese after raising over $300,000 in capital to get his exercise startup off the ground.
By 2014, Peloton started selling bikes and opened its first studio in Manhattan in which instructors led classes that could be streamed into peoples' homes.
Moving on to 2019, when the company went public, Peloton thrived during the early pandemic as gyms shut down and people purchased exercise equipment while working from home.
Since then, demand has fallen as Americans returned to gyms and their pre-pandemic routines, with the stock down nearly 70% this year alone.
