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The Wall Street Journal: Activist investor wants Peloton to fire its CEO, pursue a sale

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An activist investor wants Peloton Interactive Inc. to fire its chief executive and explore a sale after the stationary-bike maker’s stock plummeted more than 80% from its high, as growth slowed.

Blackwells Capital LLC has a significant stake of less than 5% in Peloton PTON, +11.73% and is preparing to push the company’s board to fire CEO John Foley and pursue a sale, according to people familiar with the matter. The firm believes Peloton could be an attractive acquisition target for larger technology or fitness-oriented companies, the people said.

Once a pandemic darling as homebound customers ordered its exercise equipment that pairs with virtual classes, Peloton’s stock is trading below its September 2019 initial public offering price of $29 a share.

Peloton’s shares plunged 24% Thursday after a CNBC report that it was temporarily halting production of its products because of decreasing demand. Foley said in a subsequent letter to employees that Peloton is reviewing the size of its workforce and resetting production levels, as the company adapts to more seasonal demand for its equipment. He also said the report was incomplete.

Foley also said in a statement that day that the company is “taking significant corrective actions to improve our profitability outlook and optimize our costs” and would share more details with earnings Feb. 8. The company reported preliminary second-quarter revenue of $1.14 billion and said it ended the quarter with 2.77 million subscribers.

An expanded version of this report appears on WSJ.com.

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