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Peloton’s founder and former CEO John Foley has sold company stock worth about $50 million to MSD Partners — an investment firm linked to tech billionaire Michael Dell – as the struggling fitness brand attempts an overhaul under a new boss.
Foley, who stepped down as CEO last month and became Peloton’s executive chairman, sold about 1.92 million shares, according to a regulatory filing made public on Wednesday. Despite the sale, Foley retains voting control at Peloton.
MSD Partners bought the stock at $26 per share – a steep discount compared to Peloton’s peak in the at-home fitness boom during the COVID-19 pandemic. Peloton shares touched highs of nearly $170 in January 2021, but the stock has plunged in recent months during a sag in demand for the company’s bikes and treadmills.
“This decision to exercise some stock options and sell those underlying shares in a private sale to MSD Partners was John’s decision, based on his own financial planning,” Peloton said in a statement.
Foley was replaced as CEO by former Spotify and Netflix CFO Barry McCarthy, who told Peloton employees last month the founder won’t be “scaling back” his role at the company.
Led by former Goldman Sachs executive Greg Lemkau, MSD Partners manages more than $20 billion in assets for Dell and other investors.
Lemkau told Bloomberg that Peloton “is an exceptional brand and MSD Partners is pleased to have this opportunity to back Barry McCarthy and the Peloton team as they position the business for long-term growth.”
The stock sale could antagonize Foley’s critics as Peloton seeks to turn around its business. Foley’s leadership at Peloton drew mounting scrutiny prior to his exit as CEO.
As The Post previously reported, activist investor Blackwells Capital – one of Foley’s harshest critics – slammed the founder in January for selling stock while the company and its shareholders struggled.
“All the while, shareholders have lost nearly $40 billion in wealth. Mr. Foley, in contrast, has sold stock regularly and repeatedly, reaping more than $115 million in proceeds,” Blackwells Capital said in a scathing letter to Peloton’s board calling for Foley’s dismissal.
The Peloton founder previously sold nearly $100 million in stock in 2021, according to the Wall Street Journal. A representative for Peloton declined further comment.
Foley’s tenure also resulted in some internal discord, with insiders grumbling about his decisions to cancel a holiday party for corporate staffers and buy a $55 million mansion in the Hamptons while the company faced a financial crunch.
Foley stepped aside as part of a major restructuring at Peloton. The company laid off about 20% of its corporate workforce, or roughly 2,800 employees, and canceled plans for a $400 million factory in Ohio.
Peloton said the layoffs and other cost-cutting measures would eventually result in $800 million in annual savings.
McCarthy said the job cuts were unavoidable because Peloton’s financial structure would have been “unsustainable” over the long term.
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