Peloton’s new CEO has rejected the idea of being a home fitness group put up for saleInstead, it vows to continue growing by doubling its content, expanding into new countries, and increasing its product portfolio.
Shares of the New York company rose last week after reports of this Nike, Amazon Other groups were evaluating potential bids after their market value collapsed by more than 80 per cent.
But Barry McCarthyThe former chief financial officer of Netflix and Spotify who was named Peloton CEO last week, told the Financial Times that he was moving from California to New York to seize a long-term growth opportunity, not to oversee a sale.
“If I thought the company was likely to be taken over for the foreseeable future, I can’t imagine it would be a rational business to move across the country,” he said. “There are so many other things I can do during my time that are very profitable than hanging out with a company about to sell.”
McCarthy acknowledged that any decision to sell would be in the hands of insiders who control the majority of votes through oversight of the shares, including Co-founder John Foleywhich last week resulted in the CEO role becoming CEO.
“This is not my vote,” McCarthy said. “However, it is a shareholder vote, and I am confident that a large percentage of the vote will be cast for my leadership of the company, which is why I agreed to go into the business in the first place.”
Peloton shares fell as much as 5 percent after the Financial Times published McCarthy’s comments, and were down 3 percent to $33.58 in late morning trading on Monday.
one active investor, Blackwells Capitalurged Peloton to find a buyer and incentivize it to scrap the dual-tier voting structure.
McCarthy said his growth strategy will focus on content, explaining that Peloton’s “where the magic lives” is on its digital screens, not its connected bikes or treadmills. Expanding the digital community and enhancing content could make Peloton “a very fast-growing company with very high profit margins,” he said.
McCarthy said his “playbook” will involve developing “product line accessories” so customers can own multiple devices. He added, however, that a “completely different pricing structure” could replace the $39 monthly subscription fee that has remained flat since the company sold its first bikes via Kickstarter.
FT has separately obtained details of the launch of two gears in development in Peloton.
The first, codenamed Project Caesar, is a connected rower that provides feedback on a user form. According to photos and spec details seen by the Financial Times, the rower features the same tablet as the Peloton Bike+ product, works with magnetic resistance and will feature instructor-led lessons in studios and on the water.
In recent months, some employees have been testing the rower in their homes. Two people familiar with the matter said it could be announced before or at “Homecoming,” an annual Peloton fan event that will take place on May 13.
Project Cobra will introduce the first power product dedicated to Peloton. It is designed to compete with the Tonal, a cable reel weighing system manufactured by competitor Peloton. Unlike the Tonal, the Cobra is not attached to the wall and is paired with a TV rather than a touch screen. The product doesn’t look as imminent as the rower.
McCarthy declined to comment on specific launches but emphasized that Peloton was “a connected fitness company, not a bike company.”
McCarthy said Foley will continue to play instrumental roles in products, strategy and vision, while his job is to create an environment in which everyone performs at their best, as a “professional football coach.” He resented the suggestion that it might not be clear who is leading the company.
“To be unequivocally clear, I’m the CEO. Decisions land on my desk. If there’s a disagreement between us about the path forward, I’ll get the last vote,” McCarthy said. “Now, do I come without John?” No. Does he have superpowers? Yes . . .[And I’m going]To absorb every ounce of superpower from him for as long as he will allow me to do so.”
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