Some big investors loaded onto Peloton as stocks tumbled

A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Market site in New York City, New York, U.S., September 26, 2019. REUTERS/ Shannon Stapleton

BOSTON, Feb 14 (Reuters) – Peloton Interactive Inc’s share price fell more than 50% in the last three months of 2021, but several top investment firms were so sure the company home fitness could pick up whether they bought new or added to existing positions.

Durable Capital Partners, led by former T. Rowe Price chief investment officer Henry Ellenbogen, has purchased 5.4 million shares of the company known for its stationary bikes, treadmills and on-demand courses, according to regulatory filings made on Monday.

Ricky Sandler’s Eminence Capital bought 2.6 million shares. Scott Ferguson’s Sachem Head Capital Management took a new stake with 1.6 million shares, according to filings.

The 13-F documents require fund managers to itemize the amount of stock they held in US companies at the end of the previous quarter. Although the filings are retrospective, they are closely monitored for possible investment trends.

Tiger Global Management, already a Peloton investor, bought an additional 3 million shares, increasing its investment by 41% and Baillie Gifford, Peloton’s largest shareholder, added an additional 3.4 million shares, increasing its stake by 12%, according to the documents filed.

It was unclear when these investors bought. On December 31, the last day of the quarter, Peloton was trading at $35.76, down significantly from the start of the quarter at $86.71.

Among the considerable sales, Altimeter Capital exited its Peloton position by selling 5.6 million shares. Coatue Management sold 3.7 million shares, reducing its stake by 89%, according to filings.

Viking Global Investors also sold 2.5 million shares, reducing the position by 39%. Daniel Loeb’s Third Point exited his position by selling 600,000 shares.

Since then, Peloton shares have slid further. They closed at $32.83 on Monday. The company’s value fell to $11.5 billion, a far cry from its peak of $50 billion.

Activist investment firm Blackwells Capital last month began suggesting the company sell itself. Some potential buyers appear to have spoken with bankers even as Peloton reported it was not for sale.

As Peloton became a pandemic-era darling, its fortunes began to fade due to supply chain issues, slowing sales as gyms reopened, high costs and a recall of one of its products.

Last week, the company said John Foley, co-founder and its chief executive, had been moved to the position of executive chairman and replaced as CEO by Barry McCarthy, former chief financial officer of Netflix and Spotify.

Wall Street analysts have generally welcomed McCarthy, but the stock price remains depressed.

Reporting by Svea Herbst-Bayliss; Editing by David Gregorio

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