Blackwells Capital Activist Presentation Deck
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POOR DECISION MAKING: INABILITY TO FORECAST DEMAND
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The actual hardware sales are incredibly predictable. It's a beautiful business. ¹
Foley insisted demand would only ever increase
Foley massively increased production capacity in 2020,
building inventory
In February 2021, Foley boasted: "We've increased the
[manufacturing] capacity by 6x, which is pretty herculean, but
we're definitely not going to stop there. We bought Precor.
We're going to be investing in U.S. manufacturing."4
But then demand slowed. Foley noted (at the same
February conference): "We're now making more bikes
and treads than we're selling"4
"One employee said warehouses resembled 'jigsaw puzzles' with
employees trying to figure out where to stuff another bike."2
Peloton has now been forced to moth-ball production²
BW BLACKWELLS CAPITAL
1. Source: John Foley on CNBC. November 5, 2019. https://www.youtube.com/watch?v=jZO-IBmp390
Source: https://www.businessinsider.com/leaked-slides-show-peloton-planning-production-pause-2022-1.
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"How [do] you envision managing,
meeting the incredible demand that
you're seeing now versus the risk of
overbuilding [supply]..."
John Foley's Response
"[T]hat's a term that's never come up
in the Peloton senior leadership
rooms or boardrooms...We see that
we're going to be able to market into
a massive opportunity that we're
going to need supply chain capacity
for years and years."³
Mr. Foley responding to a question from a Goldman Sachs analyst on Q4 2020 Earnings Call.
Mr. Foley at Goldman Sachs Investor Conference, February 11, 2021.
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