John Foley, co-founder and former chief executive officer of Peloton.
Michael Nagle | Bloomberg | Getty Images
Peloton co-founder and ex-CEO John Foley has sold about $50 million in stock to an investment firm backed by Michael Dell, MSD Partners, according to a securities filing.
The sale involved about 1.92 million shares, the Wednesday filing said. Foley still owns enough after the sale to maintain effective voting control of Peloton.
Foley stepped down from the CEO role in February, and was replaced by former Netflix and Spotify executive Barry McCarthy. The Peloton co-founder transitioned to executive chairman, and McCarthy has said the duo will continue to work closely together.
The shakeup happened as Peloton faced slowing momentum for its connected fitness equipment and mounting expenses, due to a series of missteps and poor investments during the Covid pandemic.
McCarthy sits on the board of a blank-check company also backed by Dell’s family office, which manages more than $20 billion on behalf of the founder of Dell Technologies and other investors.
Representatives from Peloton and MSD partners didn’t immediately respond to CNBC’s request for comment.
Foley sold nearly $100 million worth of his stock last year, securities filings show. Most of his sales have been for above $110 a share.
Foley sold his stock to the Dell firm at $26 a share, below an IPO price of $29, according to Wednesday’s filing. Peloton shares have lost about 75% of their value in the past 12 months.
Before Foley stepped down as CEO, activist Blackwells Capital, which has a less than 5% stake in the business, publicly criticized his leadership and pushed the business to consider a sale to a company like Nike or Apple. In a February slide deck, Blackwells said the company was “grossly mismanaged.”
The activist also called attention to “excessive” selling by Peloton insiders when shares had been trading closer to their highs.
Blackwells said in its presentation to Peloton’s board last month that a number of executives had pledged their shares. It said that can prove to be troublesome, because it can lead to forced stock sales in the event of a margin call, thereby accelerating a downward spiral in the stock price.
It’s unclear whether Foley was facing a margin call with this most recent sale.
