Peloton founder sells $US50 million of shares to firm backed by Michael Dell

Ex-CEO John Foley still maintains effective control of Peloton after sale to MSD Partners.

Peloton has lowered its revenue forecasts several quarters in a row, and has said it would cut roughly 20 per cent of its corporate positions to help cope with widening losses as demand cools. Picture: AFP

Peloton Interactive’s founder and former CEO, John Foley, has sold about $US50m ($68.5m) worth of shares in the company to an investment firm backed by computer entrepreneur Michael Dell, according to a securities filing.

Mr Foley, who stepped down in February as troubles mounted at Peloton, still holds enough shares after the sale to maintain effective control of the exercise-equipment maker.

MSD Partners, backed by Mr Dell’s family office, said in a statement that it was pleased to back new chief executive Barry McCarthy, the former chief financial officer of Spotify Technology and Netflix.

Mr McCarthy sits on the board of a blank-cheque company also backed by Mr Dell’s family office.

Peloton, in a statement, said Mr Foley’s decision to sell shares in a private sale was “John’s decision, based on his own financial planning.” Mr Foley sold nearly $US100m worth of his stock in 2021.

Mr Foley converted 1.9 million Class B shares, which entitle holders to 20 votes per share, into Class A shares, which count for one vote per share, and sold those shares to MSD.

The New York-based company has lowered its revenue forecasts several quarters in a row, and has said it would cut roughly 20 per cent of its corporate positions to help cope with widening losses as demand cools.

Peloton shares have lost 80 per cent of their value in the past year, and are now trading close to pre-pandemic levels, despite the company nearly tripling its revenue in the same period.

The Wall Street Journal