Justin Paget
Peloton Interactive (NASDAQ:PTON) was among the worst performers in the market on an already down day for most sectors, as a surprise shift in the boardroom added to pain for the fitness bike manufacturer.
Shares of the former pandemic darling fell 10.32% in Tuesday’s session, adding to losses that have amounted to an over 70% decline year to date.
The outsized decline on Tuesday came after the company accepted the resignation of co-founder and former CEO John Foley from his position as executive chairman, effective immediately, on Monday evening. His departure was joined by the announcement of a planned exit of fellow co-founder and Chief Legal Officer Hisao Kushi, effective October 3.
Kushi will be replaced by former Uber Chief Deputy Counsel Tammy Albarrán, while Karen Boone will assume the role of Board Chair.
Greg Selker, Managing Director and North American Technology Practice Leader at Stanton Chase, told SeekingAlpha that the company became a victim of overaggressive expansion during the pandemic wherein they believed growth would continue and “cover the sins” of the company. As such, staff cuts and a strategy reorientation under new leadership in 2022 was not unexpected, even in the upper echelons of the company’s management.
Selker added that the new hires to replace the departing co-founders beg questions about the company culture.
“The departure of two co-founders and a replacement of the Chief Legal Officer with a person from Uber, with the press release mentioning her work in the ‘cultural transformation’ at that company, that seems to imply issues with the culture of the company that might need to be addressed,” he said.
Of course, aside from the executive shakeup, a general market downdraft amid a hotter than expected inflation report dragged down many stocks that rely upon consumer discretionary spending. Peloton’s (PTON) products fall squarely in that category, making the slide not so far from the norm on Tuesday.
Read more on the company’s latest legal battles.
Image and article originally from seekingalpha.com. Read the original article here.