Some two months after announcing massive business changes and days before reporting its first-quarter results on May 10, Peloton Interactive is reportedly looking for a suitor to a minority stake of 15 percent in the fitness company that is now headed by former Netflix and Spotify executive Barry McCarthy. The Wall Street Journal, which first reported on the potential development late yesterday afternoon, said the discussions with possible interested parties have only begun, and there is no guarantee that one will emerge.
Certainly, Peloton could use new capital as it continues developing a turnaround strategy under McCarthy and under pressure from activist investor Blackwell Capital LLC which wants it transformed or sold. In a presentation released last month, Blackwells listed Amazon, Google, Warner Bros., Netflix, Adidas, Lululemon and Nike among 19 possible buyers.
Peloton, whose second-quarter revenues of $1.13 million missed Wall Street projections by $10 million as it generated a $439.4 million loss in the period due to extraordinary heavy charges, revealed numerous changes in early February to help generate at least $800 million in annualized savings and improve gross margins. The actions included cutting the workforce by 2,800, reducing the number of warehouses and winding down plans for a North American manufacturing operation.
