Peloton executives made a frantic round of phone calls to stock analysts early Thursday, scrambling to soothe concerns after the Wall Street Journal reported that the company has “six months to prove it can survive on its own,” sources told On the Money.
The paper’s report, published shortly after 7 a.m. Thursday, said Peloton is concerned whether it can stand on its own feet as it lays off another 500 employees, or 12% of its remaining workforce, in a bid to reverse losses. While the company isn’t disputing the firings, Peloton executives told analysts that comments that CEO Barry McCarthy made in an interview were “mischaracterized” by the paper.
Specifically, the Peloton executives insisted that The Journal overdramatized McCarthy’s comments — and claimed that the CEO never said the company had “six months.” Peloton executives likewise claimed McCarthy is a “true believer” who is optimistic about company’s future and confident the job cuts will work, sources said.
The Journal ended its report on a cheery note — with a quote from McCarthy that said, “I can see in the numbers the business starting to change course… which is part of what gives me confidence when I say that I think this is the last step in the process.”
Nevertheless, Peloton execs griped that the upbeat quote got buried at the end, sources said.
The damage-control operation — a series of strategically placed calls to big banks like Morgan Stanley and JPMorgan that got launched before the opening of trading — appeared to work. Peloton shares initially spiked as much as 6% to $9 despite the Journal’s report that the job cuts were a “last bid for a turnaround.”
The stock closed at $8.83, up 4%. Peloton shares have plummeted nearly 90% over the past year as it grapples with losses amid slackening demand for home-exercise equipment as the pandemic wanes.
Peloton didn’t return calls seeking comment. A spokesperson for the Journal, which shares a common owner with The New York Post, didn’t immediately respond to requests for comment.