Peloton (NASDAQ: PTON), the gift that keeps on giving when it comes to breaking news headlines.
The neverending soap opera that is Peloton stock has delivered yet another significant twist. John Foley is now stepping down from the company as acting CEO and will rotate into an executive chair position.
Who’s the new Peloton CEO?
Barry McCarthy will be replacing John Foley as the CEO of the home fitness company. McCarthy’s tenure spans roles at renowned subscription services businesses such as Netflix and Spotify, where he held the role of Chief Financial Officer at both companies.
A fitting replacement, given the ongoing cost structure struggles at Peloton.
Is Peloton still an acquisition target then?
While it’s not completely out of the question, the decision-making at Peloton is telling. It looks like the company is exploring all other options to revamp the business first before searching for a sale.
Nonetheless, former CEO Foley has stated in the past:
“We are open to exploring any opportunity that could create value for Peloton shareholders.”
It’s plausible the option has been considered, but for now, at least, we can assume that the idea has been put on the backburner and will more likely be called upon as a last resort.
What does the future look like for Peloton?
There likely won’t be any slowdown in wild swings relating to price action. From an investment perspective, investors should be wary not to get involved in a business just because of a potential buyout that could be on the table down the line. When investing in any company, investors need to maintain a long-term perspective, focusing on the fundamentals, not speculation.
On a positive note, however, management is well aware of the problems and is making the changes necessary to support the future viability of Peloton’s long-term vision.
With Peloton, there are certain inherent risks that will be ongoing for the foreseeable future, and whether or not these issues are solvable, is still yet to be seen. But if the business pulls it off to become a turnaround story, there’s potential for Peloton not only to capture a leading market share in the $5.5 billion home fitness equipment market but to also disrupt the traditional global fitness market worth just shy of $97 billion. If it manages to do that, the opportunity with Peloton’s subscription model is endless, but for now, it has a lot of work to do.
Financial Writer at MyWallSt
David's favorite stock is Google. He's a daily user of its YouTube platform, where you can learn or find something brand new at the touch of a button. He believes the company will continue to grow for many years to come.