SEC Targets Activist Investors, Peloton Arguments |
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First off, a set of rules floated by the SEC yesterday is making waves. The agency is seeking to, 1) shorten from 10 to 5 days the window of time that activists have to disclose they have crossed the 5% ownership threshold in companies, and 2) to count derivatives that activists hold towards that 5% threshold. Big changes if instituted.
Back to regular programing… everyone seems to have a slightly different point of view on what happened at Peloton and what’s next. Here are some of the arguments we saw this week from the various sides of the discussion.
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John Foley is out. Voting control of the company didn’t ultimately protect his position as some might have expected. Barry McCarthy has a strong reputation and, as Reid Hoffman told the FT, he wouldn’t have taken the job if he didn’t have a mandate.
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John Foley is still in charge. The dual class share structure at PTON remains intact, so does Foley’s effective control of the company and veto power on any major moves, including M&A. What’s more, in his note to employees, Barry McCarthy said Foley won’t be scaling back his involvement and contribution to decision-making at Peloton.
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The company is for sale. Amazon and Nike have reportedly hired advisors to explore a potential acquisition. Blackwells argues there are at least 17 other companies who could potentially be interested. Foley himself told The Wall Street Journal that the company would be open to “any opportunity that would generate value for shareholders.”
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The company isn’t for sale. No formal sale process has been announced. The new CEO needs to be given time to turn around the company. There are also doubts about the willingness or ability of many potential suitors to pursue a deal, and the analyst community seems to believe Foley is committed to a standalone Peloton at least in the short term.
Have a great weekend,
Chris and Felipe
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Through a combination of focused lectures and case studies, curated readings, and in-depth interviews with over 50 thought leaders, we demonstrate how to incorporate environmental, social, and governance considerations into business and investment strategy.
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Now recognized as one of the premier M&A, corporate and securities law conferences in the country, the Tulane Corporate Law Institute continues to deliver an unparalleled educational and networking experience in a fascinating city.
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Hosted at the Lotte New York Palace, this event will focus on the latest campaign practices of activists, how they unfold, their outcomes, and how boards and executives work constructively toward improved stock performance.
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