[Fox Business] Peloton could be poached by private equity firms: report
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Peloton’s stock jumped Monday on news that the beleaguered high-end fitness company is being eyed by private equity firms for a potential buyout.
The company, which has been trying to turn around mounting losses, started talks with one firm, people familiar with the matter told CNBC. The source didn’t specify the firm’s level of interest in actually acquiring the company, according to the report.
Peloton told FOX Business in a statement that it does “not comment on speculation or rumors.”
Peloton’s stock opened more than 16% higher on Monday after CNBC’s report.
A LOOK AT PELOTON’S ROUGH RIDE POST-PANDEMIC
This comes as concerns over the company’s uncertain future grow.
Last week, CEO Barry McCarthy was ousted, and the company announced it was cutting about 15% of its global workforce, about 400 employees, to lower costs.
In 2022, McCarthy was tapped to replace co-founder John Foley and turn around the company that faced a post-pandemic slump and struggled to navigate after the tragic death of a child involving one of its treadmills, but that never happened.
PELOTON RAISING SUBSCRIPTION FEES, CUTTING EQUIPMENT PRICES
Following a surge in business during the pandemic, the company faced mounting losses when social distancing restrictions eased and people went back to gyms.
It was laid off hundreds of employees, raised the prices of its equipment, outsourced manufacturing to a Taiwanese company and started to sell its products outside its stores at Amazon and retailers like Dick’s Sporting Goods, to attract more customers.
It also made its app more accessible by offering more membership tiers and offering many classes for free, in another attempt to drum up business.
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Karen Boone, the current Peloton chair, and Chris Bruzzo, a Peloton director, will serve as interim co-CEOs while the board conducts a search for McCarthy’s permanent replacement.
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