(Bloomberg) — Peloton Interactive Inc. founder and Chief Executive Officer John Foley’s stint as a billionaire has ended, at least for now.
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Foley’s net worth fell to about $850 million Friday as shares of the fitness-equipment maker tumbled as much as 34% Friday, after the company cut its annual revenue forecast by as much as $1 billion.
Peloton, once a darling of the pandemic economy, benefited from last year’s lockdowns as people abandoned gyms and bought home-fitness machines. Its stock had soared almost six-fold from its 2019 initial public offering to reach a market valuation of $49 billion in early January, making Foley a billionaire along the way.
A quickening return to normalcy, increased competition and strained supply chains are conspiring to curb demand for the company’s stationary bikes and other high-end workout products.
Foley, 50, has pledged 3.5 million shares as collateral for personal loans, equal to 39% of his directly held stake, according to a filing. In May 2020, Goldman Sachs Bank USA made a regulatory filing showing that Foley had pledged Peloton shares as collateral for a revolving loan. Goldman Sachs Group, the bank’s parent, was one of the lead underwriters for Peloton’s IPO.
More than two-thirds of Foley’s wealth consists of options that give him the right to purchase more Peloton stock over time. He began converting options and selling the resulting shares in monthly intervals last year. Altogether he has sold almost $120 million of Peloton stock, according to Bloomberg calculations. Many of his options are still in the money, even after Friday’s plunge.
Chase Coleman’s Tiger Global Management is among Peloton’s biggest investors, with a 3.2% stake, according to a filing. Other investors include Dan Sundheim’s D1 Capital Partners and Philippe Laffont’s Coatue Management.
(Updates with details on Foley’s pledged shares in sixth paragraph.)
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