After a punishing year for the at-home fitness company Peloton, the company is reportedly looking to sell nearly a fifth of its business in an effort to absolve themselves of near-term financial headwinds.
According to the Wall Street Journal, the company is perusing the catalog of industry giants and private equity firms alike in their search. Such a deal might not pan out, but new money might help the downtrodden pandemic-era giant find its way in a post-pandemic world.
The company was once valued at over $50 billion, but has come down to a valuation just north of $5 billion this week. Amidst that reversion, the company has replaced its CEO, cut thousands of jobs, and employed the service of a management consulting company. One activist investor said that hiring [the management consulting company] was an admission of failure.
The company’s new CEO, Barry McCarthy, indicated his desire to create a more digital-first fitness brand, rather than a hardware giant. Such a move would position the company as a subscription software service for the gym. McCarthy has led as a financial officer at Netflix and Spotify before accepting this role, two inflation-punished businesses with a lot of headwinds fighting them.
He might know quite well that the road ahead looks bleak without swift changes. At this stage in the game, Peloton‘s turnaround is looking very bleak.
$PTON was down -11% today, trending in the top ten tickers on Stocktwits.