Peloton Shares Surge On Private Equity Firm Buyout ReportĀ
Just one week afterĀ Barry McCarthy, CEO of Peloton Interactive,Ā announcedĀ his departure following a disastrous tenure that saw shares plummet by 92%,Ā CNBCĀ reports private equity firms areĀ circling the struggling company, known for strapping iPads on fancy exercise bikes and charging wealthy consumers a hefty premium, for aĀ potential buyout.
People familiar with the talks sayĀ Peloton has spoken with at least one private equity firm. However, the firm’s interest in acquiring the company is unclear. The people also say several otherĀ private equity firms have been interested in acquiring the company.Ā
Responding to the report, aĀ Peloton spokesperson told CNBC,Ā “We do not comment on speculation or rumors.”
“Firms have zeroed in on how to cut Peloton’s operating expenses to make a buyout more attractive,” CNBC said.Ā
Last week,Ā Peloton CEOĀ Barry McCarthy announced he would step down, while the company said it would undergo anotherĀ broad restructuring plan that would save it more than $200 million by the end of 2025.Ā
Following the report, the company’s shares surged by as much as 18% in premarket trading in New York.
The news comes as Peloton’s float is heavily shorted, with at least 15% short, equivalent to about 50 million shares.Ā
UnderĀ McCarthy’s tenure, shares have plunged 92%, mainly because demand for at-home exercise bikes and treadmills has fallen since the pandemic.Ā Consumers have returned to gyms, andĀ or just can’t afford the overpriced equipment PelotonĀ has to offer.Ā
Tyler Durden
Tue, 05/07/2024 – 09:05
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