Is Peloton a clown show? Gosh, it sure seems like it sometimes.
They had treadmill recalls. The character “Big” from Sex and the City died on a Peloton bike in an episode, and the company claimed they didn’t know what the plotline would be in the episode that turned into a pr disaster.
The company that feasted on fitness freaks being banned from their gyms and health clubs by local governments during the pandemic provides a monthly case study in corporate blunders. At least it sure seems that way.
Here’s the latest; executives and insiders at Peloton sold almost $500 million worth of their stock before the stock price crashed and burned. This is according to filings with the Securities and Exchange Commission, so it’s pretty much factual.
That’s horrible news for investors who bought into the hype of what they thought was a competently run company that might make them an ROI. The stock was down 80% from its peak a year ago. 80%!
The stock was sitting at $29.11 on Tuesday. When the CEO of Peloton and other execs sold their shares, the price was over $100. Truly incredible.
Here’s how much confidence the leaders of Peloton had in their company in 2021 – they sold $496 million worth of stock. It’s almost laughable at how bush-league that seems. Hey, at least no C-suite exec actually died doing a workout on a bike. Like what happened to “Big.”
John Foley, the CEO, and co-founder, banked $119 million, most of his shares were sold at $110 or higher. Great job John. The sales were part of a prearranged 10b5-1 plan. That plan called for Foley to sell up to 2.4 million shares through October of 2022, but he told the board of directors he was terminating that plan on August 30, 2021, after selling one million shares. There was no reason given for canceling the plan, but in November, Peloton’s stock crashed after they released their sales forecast. Meaning if he sold the additional one million-plus shares, he would have made a fraction of what he made on the first million.
William Lynch sold more than $105 million in shares. He’s the company president. Hisao Kushi is the co-founder and chief legal officer. She had a good Christmas after selling her $90 million in shares.
The chief product operating officer sold over $25 million. Heck, even the board got in on the well-timed fun. Karen Boone, a board member, sold over $20 million in stock at $140 per share.
Does the phrase “unmitigated gall” come to mind for anyone?
If you’re a fan of Peloton, you can look forward to a significant rise in product costs. It’s coming this year.
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