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Peloton Stock Slides On Report John Foley To Step Down, Company Plans Major Job Cuts

The Wall Street Journal is reporting that CEO John Foley will step down from the company, potentially paving the way for a sale of the connected fitness equipment maker.

Peloton  (PTON) - Get Free Report shares moved lower in pre-market trading Tuesday following a report that John Foley will step down as CEO of fitness equipment maker.

The Wall Street Journal said Foley, 50, will transition to the Peloton board to make room for Barry McCarthy, a former Spotify  (SPOT) - Get Free Report and Netflix  (NFLX) - Get Free Report CFO, as part of the group's cost-cutting and business overhaul.

The Journal also reported that the group is also planning to eliminate 2,800 jobs, or nearly a fifth of its overall staff, as activist investors at Blackwells Capital LLC continue to press for changes and prompt the group into a takeover following last month's multi-billion dollar sell-off and a disappointing set of pre-released fourth quarter earnings.

Blackwells called for the firing Foley, and the potential sale of the company, in the wake of last week's multi-billion sell-off following reports of production halts and cratering customer demand.

Peloton shares, in fact, soared more than 20% Monday amid speculation that Amazon  (AMZN) - Get Free Report is preparing a potential takeover bid, with Britain's Financial Times also reporting potential interest from Nike  (NKE) - Get Free Report, one of the companies pushed by Blackwells Jason Aintabi as a possible suitor.

Peloton shares were marked 2.6% lower in pre-market trading to indicate an opening bell price of $28.98 each.

Peloton published preliminary second quarter earnings projections on January 20, which included revenues of $1.14 billion and adjusted EBITDA in the region of -$270 million to -$260 million, firmly inside prior guidance of a loss of $350 million.

CEO Foley said at the time that the group was "considering all options ... to make our business more flexible", adding that its taking "significant corrective actions to improve our profitability outlook and optimize our costs across the company."

The group will publish its formal December quarter earnings after the close of trading Tuesday.