John Foley’s dream came true and he was worth more than 50,000 million dollars on the stock market. His idea of internet-connected exercise bikes became a reality at Peloton, founded in 2012. The company went public in 2019 and had its sweet moment in the midst of a pandemic. Back then he seemed unstoppable. The shares soared to over $160 before crashing into reality. The company closed 2021 with record losses, named a new CEO and has now accepted co-founder Foley’s resignation from his role as CEO.
“He is widely regarded as the pioneer who was the driving and creative force for today’s global connected fitness industry,” says the company in the statement in which it has announced its departure.
Foley had already been somewhat relegated from day-to-day operations with the appointment of Barry McCarthy as CEO. With him, the company tries to become a business of subscribers who pay a fee for training. McCarthy hails from Netflix and Spotify and tries to emulate that model. The company has been shelving ambitious plans for industrial manufacturing and has also turned its distribution channels around.
But the transition is being ruinous. The company suffered in its last fiscal year, closed on June 30, losses of 2,823 million dollars (a similar figure in euros), compared to the red numbers of 189 million dollars the previous year. The company’s shares, which once traded at more than $160, are now at $11, having lost more than 90% of their value in a year.
The pandemic is being left behind and outdoor exercise has regained ground against sports at home. Inflation has also changed the habits of consumers, who spend more on gasoline and food and have less disposable income for discretionary consumption. In addition, whoever buys an exercise bike has it for several years, especially considering the high prices at which they are sold, starting at around $1,500. Many bicycle buyers have put them up for sale second hand, competing with the company itself.
In the statement announcing his departure, Foley said: “As I reflect on the journey Peloton has taken since we founded it, I am very proud of what we have built together. From day one, the incredible talent we’ve had on our team and the dedication, hard work, and creativity of every single Peloton employee is what has gotten us to where we are today. We founded the company because we wanted to make fitness and wellness comfortable, fun and effective. Thanks to the work of thousands of people, we have achieved it”. And he adds: “Now the time has come to start a new professional chapter. I am passionate about building companies and creating great teams, and I am excited to do it again in a new space”, although without specifying what it refers to.
Along with Foley, Hisao Kushi, the legal director of the company since 2015, also leaves the company. The Peloton board has appointed Karen Boone as the new president, with non-executive functions. Tammy Albarrán will replace Kushi as General Counsel and Corporate Secretary. “Albarrán is one of the most recognized legal executives in the technology industry and she brings a great deal of experience,” says the executive’s company, which was Uber’s number two on legal issues.
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