Peloton Stock ( NASDAQ:PTON )
S&P Global Market Intelligence said Peloton stock dropped 32% in September. The market did not react well after hearing that two founders of the company were departing .
What’s the Reason?
For Peloton ( NASDAQ:PTON ), this was only the beginning of another difficult period. Once a darling of the pandemic, the linked fitness startup has seen its revenues drop, and its losses have soared since the epidemic’s peak.
In February, Peloton ( NASDAQ:PTON ) announced that founding CEO John Foley would be “transitioning” to the role of chairman of the board, with former Netflix executive Barry McCarthy assuming the role of CEO and president. Peloton’s new leadership has implemented an initiative to increase efficiency while cutting expenses. That prompted managerial turnover and rumors that Amazon or another major corporation may buy Peloton stock.
Meanwhile, the decline in sales has persisted. In the 2022 fiscal year’s fourth quarter (ending on June 30), sales dropped 28% year over year, and the net loss ballooned by almost 300% to $757 million. The number of members is up 15% from the previous year, and the number of linked fitness memberships is up 27%. McCarthy said in his shareholder letter that the company has “renegotiated supplier contracts and dramatically reduced cash outflow.” Although they are necessary components of recovery, they don’t inspire much enthusiasm among investors.
Foley and co-founder/chief legal officer Hisao K...
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