2. Peloton Interactive, Inc. (NASDAQ:PTON)
Number of Hedge Fund Holders: 62
Peloton Interactive, Inc. (NASDAQ:PTON) is a New York-based company that markets and sells interactive fitness products in North America and internationally, in addition to offering subscriptions to online exercise classes.
Blackwells Capital, an activist investor based in New York which owns a less than 5% stake in Peloton Interactive, Inc. (NASDAQ:PTON), called for the company to remove its CEO John Foley from his position and put itself up for sale on January 24. Blackwells Capital has cited “grave” concerns over Peloton Interactive, Inc. (NASDAQ:PTON)’s performance that led to this petition. Further, the activist investor in its open letter to the company, criticized Peloton Interactive, Inc. (NASDAQ:PTON) for not capitalizing on its 2020 success, dwindling sales, and bad PR in mainstream television shows. The firm also highlighted Peloton Interactive, Inc. (NASDAQ:PTON)’s enormous fixed costs, directionless strategy, excessive inventory, and masses of unsatisfied shareholders. The stock is at 80% below its 2021 high.
Brian Lichtor from Roundhill Investments stated on January 22 that with an enterprise value of under $10 billion, Peloton Interactive, Inc. (NASDAQ:PTON) could make for an attractive acquisition target given its strong brand loyalty and valuable intellectual property. He believes that Peloton Interactive, Inc. (NASDAQ:PTON) could potentially be acquired by Apple Inc. (NASDAQ:AAPL), effectively integrating Peloton into the Health app. Other contenders for a possible acquisition could be Amazon.com, Inc. (NASDAQ:AMZN) and NIKE, Inc. (NYSE:NKE), according to Lichtor.
On January 26, Baird analyst Jonathan Komp lowered the price target on Peloton Interactive, Inc. (NASDAQ:PTON) to $40 from $70 and kept an Outperform rating on the shares. He is maintaining his 2023 EBITDA projections assuming the company announces a significant restructuring plan which in his view remains a potential catalyst.
At the close of the third quarter of 2021, Tiger Global Management was the biggest Peloton Interactive, Inc. (NASDAQ:PTON) stakeholder, with more than 7 million shares worth $626.4 million. Overall, 62 hedge funds were bullish on the stock in Q3.
Here is what Carillon Tower Advisers has to say about Peloton Interactive, Inc. (NASDAQ:PTON) in its Q2 2021 investor letter:
“Peloton Interactive operates a connected fitness platform offering live and on-demand classes allowing users to exercise at home. The firm’s shares were pressured in the quarter after Peloton announced a voluntary recall for both its legacy treadmill (Peloton Tread+) and its newly-launched base model treadmill (Peloton Tread). The issue surrounding the latter is somewhat troubling, as it appears it may be the result of an engineering flaw. This new treadmill offering was expected to be a key growth driver in the second half of 2021, and this development reduces our confidence in Peloton’s product pipeline. Therefore, we sold the stock.”
