Getty; Marianne Ayala/Insider
- Peloton cofounder John Foley unexpectedly announced his resignation as CEO on Tuesday.
- Before that, Peloton investor Blackwells Capital published a scathing assessment of the company.
- The deck cites Foley’s own words as it calls for his immediate removal for mismanagement.
In a surprise move, Peloton cofounder John Foley abruptly resigned as CEO on Tuesday.
Peloton CEO John Foley in 2019.
Matt Winkelmeyer/Getty Images
Before his announcement however, Blackwells Capital published a presentation calling on the company to make drastic changes.
Blackwells Capital
The deck starts by pointing out that Peloton had the worst 2021 performance in the Nasdaq 300 by a wide margin.
Blackwells Capital
Still, Blackwells says the company Foley built does have several key advantages…
Blackwells Capital
… but the financial performance of the company doesn’t live up to its potential.
Blackwells Capital
The dismal stock price chart is followed by a quote from Foley that paints him as out of touch with reality.
Blackwells Capital
Blackwells doesn’t mince words.
Blackwells Capital
It attributes Peloton’s performance problems to five key themes – all of which it ties back to Foley.
Blackwells Capital
“I’ll go sometimes months without talking to our CTO,” Foley told Time Magazine in May 2020.
Blackwells Capital
Sources: ABC News, LinkedIn, Time Magazine
“We haven’t seen any softening of demand,” he told investors on Peloton’s earnings call one year ago.
Blackwells Capital
“I don’t know,” Foley said when asked about making a more affordable Bike.
Blackwells Capital
As Insider reported, softening demand was leading to a buildup of inventory with warehouses resembling “jigsaw puzzles.”
Blackwells Capital
Source: Insider
The presentation also depicts Foley as “irresponsible” in his handling of an incident involving the death of a child.
Blackwells Capital
Foley’s $431 million purchase of Precor also indicated poor judgement, Blackwells said.
Blackwells Capital
The deck also raises questions of nepotism due to Foley’s wife Jill running Peloton’s apparel business. It was also announced on Tuesday that Ms. Foley would “transition away” from the role.
Blackwells Capital
One chart contrasts Foley’s statements to investors with his selling of almost $100 million of Peloton stock as the price continues to fall.
Blackwells Capital
Foley’s stock pledges also appear to violate Peloton’s insider trading policy, according to Blackwells.
Blackwells Capital
The deck highlights other past quotes from Foley depicting lofty – perhaps unrealistic – goals for the company, calling it “promotional puffery.”
Blackwells Capital
Meeting Foley’s goals would require an annual growth rate of 30% for the next 15 years, compared with 5% in the previous quarter.
Blackwells Capital
Blackwells even takes a shot at Peloton’s choice of management consultancy: “Hiring McKinsey is a clear declaration of failure.”
Blackwells Capital
Blackwells recommends several urgent actions, most notably: Fire CEO John Foley.
Blackwells Capital
See the full deck on Blackwells Capital’s website.
