Blackwells Capital Activist Presentation Deck
2
■
I
BW
POOR DECISION MAKING: POOR CAPITAL ALLOCATION
Foley invested $800 million in acquisitions and capex with pride
as his lodestar
Foley bought troubled Precor for $431 million believing he
could fix it and expand Peloton's reach into different types of
commercial customers: "Precor's product portfolio and
sales team will also accelerate our commercial business,
where we see a significant opportunity to grow Precor's
franchise while introducing the Peloton platform..."1
x
Months later, he was forced to admit it was a mistake:
"[W]e have reduced expectations for our commercial
channel or legacy Precor business, given both supply
and demand dynamics."2
Then, Foley invested another $400 million to develop 1 million
square feet of production capacity
X Seven months later, Foley delayed the progress,
admitting the capacity was not needed.
BLACKWELLS CAPITAL
MARKETS
INSIDER
"The slowdown in demand for Peloton
makes its past decisions particularly
challenging. The company acquired exercise
equipment manufacturer Precor for $420
million in 2020 and announced it would build a
US manufacturing facility for about $400
million. But Peloton may not need that extra
capacity if demand doesn't recover to the
levels it saw during the pandemic."³
1. Source: Peloton Interactive Q2 2021 Earnings Call transcript.
2. Source: Peloton Interactive Q1 2022 Earnings Call transcript.
3. Source: https://markets.businessinsider.com/news/stocks/peloton-stock-falls-below-ipo-price-production-halt-demand-drop-2022-1.
30View entire presentation