Peloton CEO John Foley’s net worth tumbled $400 million late Thursday after the fitness company said it expects to bring in less revenue next fiscal year following weaker-than-expected quarterly earnings.
Foley barely hung on to his billionaire status after shares of the company, which is known for its internet-connected stationary bicycles and other exercise equipment, plummeted 24% in after-hours trading Thursday. The CEO is currently worth $1 billion, Forbes estimates, down from $1.4 billion at the end of market trading earlier Thursday. Foley’s stake in Peloton, which he cofounded in 2012, is now worth about $900 million, nearly 80% of which is the value of his stock options. He has netted an estimated $100 million after tax from selling shares of Peloton since its IPO.
Peloton reported a net loss of $376 million, or $1.25 per share, for the three-month period that ended on September 30, on revenues of $805 million. A year ago during the same period, the company made a $69.3 million net profit. Subscriber growth is also slowing. Peloton added the lowest number of subscribers this quarter since it went public in 2019, according to the Wall Street Journal.
In a letter to shareholders, Foley said Peloton was reducing its 2022 fiscal year guidance because the economy is reopening, creating a “pronounced tapering of demand.” The company expects $4.3 billion in revenue for the next fiscal year through June 2022, a 20% decrease from the $5.4 billion it anticipated three months ago.
“Although we are pleased to have delivered first quarter results that modestly exceeded our guidance, a softer than anticipated start to Q2 and challenged visibility into our near-term operating performance is leading us to recalibrate our fiscal year outlook,” Foley said in the letter.
Peloton’s weaker-than-expected earnings are a far cry from earlier in the pandemic when it benefitted from the Stay-At-Home stock surge. The fitness company’s shares shot up in March 2020 and reached an all-time high of $162 per share in December 2020, as gym shutdowns across the country forced people to work out at home. Shares were trading at $60.11 as of 8 pm ET on Thursday night.