Peloton shares surge 27% on possible takeover claims

[MongiIG]

[MongiIG]

Peloton is replacing its CEO and cutting roughly 20% of its corporate workforce as it hopes to win back investors’ confidence and reset its business for growth coming out of the pandemic.

The announced changes come days after reports circulated that Peloton could soon be a takeover target. Shares surged on hopes of a deal to be struck with a tech giant or athletic apparel behemoth. But news of a management shakeup and strategic overhaul make this path seem much less likely, at least in the near term.

The connected fitness company announced Tuesday it plans to replace CEO John Foley and cut 2,800 jobs, or about 20% of corporate positions.

Barry McCarthy, the former chief financial officer of Spotify and Netflix, will become CEO and president and join Peloton’s board. McCarthy currently serves on the board of delivery start-up Instacart.

Peloton shares were recently up around 2% in premarket trading, having closed Monday up nearly 21%. As of Monday, the stock is down about 31% year to date, giving Peloton a market value of $9.7 billion. CNBC