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Embattled Peloton stock spins higher after CEO vows legal action against ‘leaker’

The connected fitness company’s shares rose in pre-market Friday after a memo from John Foley downplayed a damaging report.

Embattled Peloton stock spins higher after CEO vows legal action against ‘leaker’
[Source Images: Peloton]

Shortly after leaked Peloton documents were shared with the press, which suggested the connected-fitness company was pausing the production of its treadmills and bikes, the company has announced that Peloton will pursue legal action against the alleged leaker.

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The news of the production halt sent Peloton shares tumbling over 23% yesterday. However, a company memo shared by cofounder and CEO John Foley helped lift the stock up over 6% in pre-market trading Friday. Foley’s memo refutes the primary message of the leaked documents, saying “The information the media has obtained is incomplete, out of context, and not reflective of Peloton’s strategy.”

Foley also goes on to state the company has identified the leaker and will proceed to take legal action. The CEO also pointed out, in bold text, that “Rumors that we are halting all production of bikes and Treads are false”—yet “all” may be the key word here.

Given the rise in Peloton’s stock in pre-market trading, Foley’s memo seems to have alleviated some investors’ fears, although it will likely send shivers through some of Peloton’s employees. That’s because the memo also alludes to potential upcoming layoffs.

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“In the past, we’ve said layoffs would be the absolute last lever we would ever hope to pull,” Foley wrote. “However, we now need to evaluate our organization structure and size of our team, with the utmost care and compassion. And we are still in the process of considering all options as part of our efforts to make our business more flexible.”

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About the author

Michael Grothaus is a novelist, journalist, and former screenwriter. His debut novel EPIPHANY JONES is out now from Orenda Books. You can read more about him at MichaelGrothaus.com

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