Peloton sinks after its new CEO says a sale of the company is unlikely, and that he's focused on long-term growth

• Shares of Peloton traded 5% lower on Monday following comments from its new CEO.
• Barry McCarthy told the Financial Times that he's focused on the long-term growth of the exercise brand rather than a potential sale.

Peloton stock traded more than 5% lower Monday following comments by its new chief executive dismissing the notion that the company could be sold.

The remarks come after Amazon and Nike were rumored to be interested in a takeover amid a campaign by an activist investor pushing for a sale of the exercise-equipment company.

"If I thought it was likely that the business was going to be acquired in the foreseeable future, I can't imagine it would be a rational act to move across the country," Peloton CEO Barry McCarthy told the Financial Times.

He aims to turn the company around by focusing on more digital content, product extensions, and possibly overhauling the current subscription structure.

McCarthy, a former exec at Spotify and Netflix, replaced John Foley's last week as head of the embattled company. While Foley is no longer CEO, he still controls a majority of Peloton's shares. And McCarthy suggested shareholders back his plans to focus on growth initiatives instead of selling the company.

"I'm confident a large percentage of the votes will be cast in favor of my leadership of the business, which is why I agreed to step into the business in the first place," he told the FT.

McCarthy steps into the CEO role as Peloton grapples with a post-COVID shift among consumers.

During the pandemic, demand for Peloton products boomed as people had to find at-home exercise options while gyms closed down. Once lockdowns eased, however, reports emerged that Peloton paused production of bikes and treadmills due to a slowdown in orders.

Peloton recently slashed about 2,800 jobs to cut costs amid plummeting consumer demand. The firm expects the layoffs to result in at least $800 million in savings per year.

Last month, Blackwells Capital called for Foley to be ousted as CEO and for Peloton to be put up for sale. Earlier this month, the Wall Street Journal reported that Amazon had spoken to advisors about a potential acquisition of Peloton. Nike was also rumored to be a possible suitor. Meanwhile, Wedbush analysts have said an acquisition by Apple would make strategic sense.

In February 2021, Peloton stock traded at above $145. Today they hover around $32 per share, marking a 77% downturn over the past year.