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Peloton's new CEO says sales isn't in the cards

Peloton's new CEO says sales isn't in the cards

Last week was an eventful week for Peloton: It found a new CEO, investors vented their fury at outgoing CEO John Foley, 2,800 employees were fired, and then some of those employees crashed outright. At the center of the drama, a bigger question was whether new CEO Barry McCarthy was brought in to shape Peloton for sale as the company's value has plummeted from the $50 billion pandemic to $8 billion. However, in an interview with the Financial Times, McCarthy has officially rejected the idea of ​​a "near future".

"If I think it's likely that the business is going to be acquired in the near future, I can't imagine it would be a logical act to move across the country. There are so many more things that I do." I can do with my time that is much more lucrative than hanging out with a business that's about to be sold,” McCarthy told The Financial Times, referring to the fact that he would be moving from California New York for the job.

McCarthy stressed that Peloton has room to grow and will focus on content because Peloton is a "connected fitness company, not a bike company." (Something that product reviewers and analysts have been saying since day one.) It tracks with McCarthy's background. Prior to becoming CEO of Peloton, McCarthy was chief financial officer at Netflix and Spotify (as well as chief operating officer at the unfortunate, poorly remembered mobile payments app Clinkle). Following McCarthy's appointment, Foley spoke about his experience with digital streaming services and the subscription business model. In an FT interview, McCarthy also indicated that Peloton's $39 monthly subscription fee could be replaced by an entirely different pricing structure.

This follows the tone set during Peloton's Q2 earnings call last week, where Foley and Peloton's Chief Financial Officer Jill Woodworth repeatedly stressed that the company would pursue "sustained growth." However, that doesn't mean Peloton has given up on hardware entirely. McCarthy told the Financial Times that his strategy involves creating "product line extensions" to entice customers to own multiple Peloton devices.

The report also said that Peloton is working separately on a connected rowing machine as well as a "dedicated strength training system." The former will reportedly feature a tablet similar to the Bike Plus, use magnetic resistance, and offer form feedback. The rover, which has long been rumored, is believed to be in the testing phase and could be announced before or after Peloton's annual "homecoming" event in May.

The strength training system is thought to be Peloton's answer to the Rival Tonal, but according to the FT, it looks like it may differ from the upcoming Peloton Guide. Tonal is a weight training system that relies on electromagnetic resistance cables and is installed directly into the user's wall. Peloton's rumored strength training device will instead be paired with television and will not be released for some time.

It looks like this is all keeping the kibosh on the Peloton sale, at least in the medium term. However, McCarthy acknowledged that the decision to sell is not really his. It belongs to the shareholders. More specifically, a group of company insiders who hold 80 percent of Peloton's voting rights, including former CEO -- and now executive chairman -- John Foley. McCarthy also said that he believed "a large percentage of the votes would be cast in favor of my leadership" and cited that as a reason he agreed to take the job.

However, the Financial Times interview also made it clear that Foley isn't going anywhere. While McCarthy tried to underline that the buck stayed with him, he also said that Foley will continue to play "an important role" in Peloton's products, strategy and vision. The two have also been praising each other publicly for the past one week and are currently seen presenting a united front. Foley told The Wall Street Journal that McCarthy was "perfectly suited" for the job, while McCarthy said the two were "perfect adults" together. This time around, McCarthy indicated that he would not leave Foley behind, and McCarthy stated that he intended to "suck every ounce of superpower out of him" as long as Foley would let him.

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