Peloton stock rebounds after activist investor pushes for CEO’s resignation

Yahoo Finance Live's Brad Smith and Akiko Fujita discuss Blackwells calling for Peloton CEO John Foley to step down and how this has caused a spike in the company's shares.

Video transcript

AKIKO FUJITA: Well, for all of the sell off talk, Brad, there's a few names that are bucking the trend today and for good reason. There's quite-- activists dialing at the pressure, and then of course potential talk of a takeover. We've got three names we're looking in on, but let's start with Peloton.

Obviously, you know this-- we're talking about a bounce back in relation to the big sell off we saw last week on those reports, that they were halting some of their production. Today, shares moving higher on news that one activist investor is really pressuring the company, specifically the CEO John Foley, to step down.

BRAD SMITH: Yeah, that's right, and it's interesting looking through the quotes that Blackwell's had put out there saying that we believe that no board exercising reasonable judgment could leave Mr Foley in charge of Peloton. The company has gotten too big, too complex, too damaged for Mr. Foley to lead it. And then they go on to say even more, saying he should have enough self-awareness and enough self-interest to resign as director.

This was very direct to John Foley, and we-- you know, over the past year, acceleratingly so, seen a lot of this focus around a founder CEO and trying to best position the company for success and whether that is the resignation for that founder CEO themself, as we saw in Twitter's case with Jack Dorsey spending more time with Square, or whether that's the case of being forced out of the position.

This is all coming into focus as Peloton is not the same company that it was when it went public. However, it's just a stone's throw from the share price when they went public. And so, with all of that in mind, at a larger base of users, the question is, how can they continue to grow out that demand. And that demand generation is going to come squarely into focus even as we were talking about that last week as well. And what that production may look like in the future, still up in the air item. But Peloton moving higher on the day for the very reasoning that an executive shakeup is exactly what this activist investor is calling for right now. And we'll see if that shakeup comes, quite frankly.

AKIKO FUJITA: Yeah, I mean, not just a shakeup, but a potential sale, which is something we talked about last week. Obviously, a lot of that is speculative, but people looking to-- you know, some of the bigger names, maybe the tech names who could find Peloton ad attractive target.