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Image-obsessed management, over-leveraged personal loans and wild promises of a $1,000 share price:
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Image-obsessed management, over-leveraged personal loans and wild promises of a $1,000 share price:

How Peloton founder John Foley lost his company


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Editorial Rating

8

Qualities

  • Analytical
  • Overview
  • Concrete Examples

Recommendation

Peloton bikes were a hit in spring 2020, as the COVID-19 pandemic shuttered gyms worldwide. Home-based fitness took off, and John Foley’s small company, with its networked exercise bikes and social media presence, took advantage, earning $2 billion a year in subscriptions. But, as Becky Peterson, Dakin Campbell and Kylie Robison report for Business Insider UK, the boom ended with COVID-19. To satisfy investors, Foley – who remains with the company – stepped down as CEO as new CEO Barry McCarthy took charge of Peloton. Will a tech or sports industry giant acquire Peloton or can the founder and the CEO save it? Foley has the grit and determination, and McCarthy the sound financial sense to pull it off.

Summary

John Foley stepped down as Peloton’s CEO, but is still committed to its success.

In 2020, Peloton blazed a trail in home-based fitness regimes, ramping up production to address the pandemic-driven demand for its high-end, networked exercise bikes with built-in video screens on which upscale, “tech-savvy” pedalers could choose from a variety of popular Peloton-produced classes. However, in November 2021 – nearly post-COVID-19 – the company struggled with tanking demand and a sinking stock price. 

Blackwells Capital, an activist investor, put intense pressure on founder and CEO John Foley to resign, which he did in February 2022. Barry McCarthy, who came from outside Peloton and has experience as a “finance chief,” replaced Foley. McCarthy made their working relationship clear when he said that all the staff, including Foley, reports to him.

No one interviewed...

About the Authors

Becky Peterson is a tech features correspondent; Dakin Campbell is Insider’s chief finance correspondent and reporter Kylie Robison covers software developers and their communities, tools, startups, and more at Insider’s cloud technology desk. Katie Warren contributed to this report.