Peloton: Foley’s Exit ‘Further Reduces the Likelihood of Sale’

By Senad Karaahmetovic

Yesterday after market hours, Peloton (NASDAQ:) announced that co-founder John Foley is resigning as Executive Chairman.

The company’s Chief Legal Officer, Hisao Kushi, also a co-founder, is also leaving the company. He will be replaced by Tammy Albarran, Chief Deputy General Counsel at Uber Technologies (NYSE:). Moreover, Kevin Cornils, the company’s Chief Commercial Officer, is also leaving Peloton.

“There wouldn’t be a Peloton without John Foley or Hisao Kushi,” new CEO Barry McCarthy wrote to Peloton employees. “Without John’s unwavering commitment to his dream, there wouldn’t be a passionate and devoted community of nearly 7 million Peloton Members. I want to thank John for paving the way.”

Foley may also decide to sell his entire stake in Peloton, according to Yahoo Finance.

These massive leadership changes come at a time when McCarthy oversees a huge transformation plan. A BMO analyst believes Foley’s exit “further reduces the likelihood of a sale.”

“We believe John Foley deserves a tremendous commendation for helping to usher the next stage in connected fitness, create a truly powerful consumer brand with fiercely loyal brand evangelists and improve the health of many (present company included),” the analyst said in a client note.

For a Telsey Advisory Group analyst, the announced leadership changes are not that important.

“We continue to believe it is early days in shaping the company’s new strategic direction and that it will take 12-24 months to have the pieces in place. Near-term, the priority is to drive new subscribers through expanded testing of the rental program and selling through third-party retailers, such as Amazon,” the analyst told clients in a note.