There’s some more drama going down in Peloton world. They’re losing money and popular instructors, and it doesn’t look good. In May, their financial troubles really became public when CNBC reported that the company was looking at ways to cut their operating costs in order to attract a private-equity firm to buy it. Their stock was down 97% from its high during the pandemic. Then, in mid-June, three popular instructors announced that they’re leaving the company. Mind & body instructors Kristin McGee and Ross Rayburn and cycling and cardio instructor Kendall Toole all opted to not renew their contracts so that they can, according to Peloton, “explore new opportunities.” All three instructors will teach their last classes this week. Is this the start of an exodus?
Last month, it became obvious that the odds of Peloton’s survival as a company were plummeting. At the time, reports were coming out that private-equity firms were thinking about taking it over. It had already lost two CEOs and downsized its expansion plans, and the stock was down 97 percent. None of the company’s efforts to firm up its situation seemed to satisfy Wall Street — an attempt to cut down on its outstanding debts sent the stock plunging by another 25 percent before recovering a little bit.
Most recently, the company has taken a more dramatic step that risks alienating portions of its die-hard fan base: culling its roster of superstar (but also expensive) instructors — the runners, cyclists, and yoga teachers who are the faces of Peloton’s video programming, and the anchors that keep millions of users coming back.
Earlier this month, Peloton announced that three of its most popular instructors — Kristin McGee, Kendall Toole, and Ross Rayburn — would be leaving. McGee, who was probably the biggest of the three stars, posted on her Instagram that she “decided to spend time to focus on my family and move on from Peloton.” Toole and Rayburn made other similar video announcements. According to Pelo Buddy, a fan site, Peloton said that the departures came “during our most recent round of contract negotiations.” It has all come across as weirdly bloodless. “I’m so sad to see my teammates go. I love them deeply, but in the same way I’m not concerned that they’re not in my life anymore,” Jess King, another instructor, told “Page Six.”
In a statement, Peloton downplayed the departures. “As with all businesses who work with professional athletes, Instructor contracts are a normal and ongoing part of the Peloton process. During our most recent round of contract discussions, three of our beloved Instructors have chosen to leave to explore new opportunities,” the company said in a statement, which also hinted that the company may hire new instructors to replace them at some point.
One imperfect way to see if a company is doing well is to see if its executives are doubling down on it by buying more shares of the company and hoping that their internal corporate efforts are rewarded by investors. That is not happening at all. During the last three months, executives — including Peloton’s chief financial officer, Elizabeth Coddington — have been selling off their shares, according to securities filings. Coddington, who joined just two years ago, appears to be dumping her stake in the company as the shares vest, or become available for sale. At one point in May, she held more than one million restricted stock units, or RSUs — a form of unvested shares — but by mid-June, she had whittled her holdings down to 174,000 RSUs. (Peloton didn’t return a request for comment on Coddington’s holdings.)
Now, executives sell shares of their companies all the time, for any number of reasons, and Coddington’s sales aren’t dispositive of anything wrong. Still, the filings show that she sold stock at an average price of about $3.68 — just a bit off its all-time low of $2.99 a share on May 28, and a far cry from when it traded in December 2020 at around $162. At this point, it wouldn’t be a surprise if there was more of an exodus from the C-suite than from the instructor roster. This points at another problem for the company: Peloton can always hire another bike instructor or yogi who wants a massive built-in audience. But it will probably cost Peloton far more to get new executives to save a company that Wall Street is leaving for dead.
Well, I guess now is the time to buy Peloton stock, lol. But let me put on my Carrie Bradshaw hat shoes for a moment as I can’t help but wonder what went down behind-the-scenes over there. Those instructor Whatsapp groups (and subgroups) must be pinging nonstop over all of this. My first reaction was that Toole, McGee, and Rayburn’s departures are clearly a result of all of Peloton’s financial troubles. And that’s probably the primary motivating factor, but Jess King’s oddly worded, “I’m so sad to see my teammates go. I love them deeply, but in the same way I’m not concerned that they’re not in my life anymore” gave me pause. That’s a really weird thing to say about your coworkers, right? What on earth is going on at Peloton? Do we think that more instructors will leave?
I have noticed that Peloton’s popularity is not what it once was, but I have friends who still faithfully take classes. The company’s business model really blew up during the pandemic because most of us were looking for challenging workouts to do safely at home. Now that society has resumed business as normal, people who prefer taking workout classes in person have just naturally gone back to that. I wonder what Peloton will do next. Will they continue to cut costs via talent? I spent some time on the Peloton subreddit and people are not happy about losing their favorite instructors. Will some investment company step in and save the day? Whatever happens, it’s clear that they’re losing members and not onboarding as many new ones to make up for it. It will be interesting to see what route they go to try to grow business again. In the meantime, best of luck to Kristin, Kendall, and Ross! I know a lot of fans are eager to find out what they’ll do next.
Peletons prices are about to become very cheap.
I have been eyeing up their treadmills so keeping my eye out….
I really hope you’re right!!! I want a peloton bike+ and a lower price would definitely push me to pull the trigger.
I didn’t read Jess Kings post as anything suspicious. She is saying just because they’re not working together it doesn’t mean they won’t be close and/or in each others lives. That’s a very normal thing to say about a coworker who leaves? Friendships with colleagues persist even if one leaves the workplace?
@2legit2quit: Idk. She literally *did* say they won’t be in her life anymore, unless the quote is incorrect. If the quote is correct, she may have misspoken and meant to say “they won’t be in her work life anymore.” But she literally did say she loves them but is not concerned that they won’t be in her life anymore, which is an odd thing to say, imho
She’s not concerned that they won’t be in her life anymore because they WILL be in her life.
Controversial take:
I don’t like Ross’s meditation classes And I had no idea who Kendall was (which as much as she may be popular, I use the app daily and if I didn’t know who she was, what are the popularity metrics compared to the contract ask?). I’m not one to split hairs on Kristin when it comes to yoga – there are better yoga coaches on that app.
When it comes to the fitness classes, I swear by Jess King, Matty, Kirsten, and Jon H. They are engaging and fun. It’s a conversation and you feel like they have your back.
I actually expect to see a larger cull of instructors because rowing and the strength and dance stuff isn’t really popular compared to the other options on the app.
I’m with you. I’m not sure these three were the most popular. I didn’t mind Ross and Kristin but I don’t even know what Kendall teaches. And I have a Peloton tread!
I don’t see how it will ever recover its previous popularity and stock price unless there is another global pandemic. I did lots of virtual classes that my gym offered during Covid, but I was just longing for the in person format again, and since my gym began offering in person classes, I’ve stopped even looking at their virtual offerings. I think they do still offer a lunch hour pre-recorded virtual class every day. I don’t know anyone who’s using them.
Oh yay, I don’t like any of these three. Sorry if others do! I wish them luck tho!
That statement needs a rewrite if Jess wasnt being sketchy. “Im not concerned that they won’t be in my life anymore” works better if the intent was to say we will still be close. But as written… yikes.
My first read made me do a double take, like you’re sad but it’s ok that they won’t be in your life as in our friendship is over? !!! But after a second and third read, I think she meant that she’s sad to see them leave but knows that they will continue to be in her life. Tone in written messaging is everything!
There’s a lot of gossip out there from my peloton sub lurkings about Kendall – an allegedly alt right boyfriend and low key posts putting her in that wheelhouse make me ok with her exit.
At the end of the day there’s so much content on Peloton that the only thing that would cause me to leave is a dramatic price increase or them putting out content that I don’t align with. It’s 108 degrees today and I don’t want to leave the house to go to the gym.
I took a class from Kendall once and did not like her vibe. Wondering if I was picking up on something
There are so many instructors on Peloton doing live classes as well as a vast library of recorded classes to choose from. My husband and I never take the live classes and search back classes for our favorite instructors or music genres. Why have a deep roster of instructors creating live content? Cut your live classes in half and there are still plenty of classes to choose from.
I am a little concerned if the company folds. It’ll just be a regular spin bike without content but the content is what makes it great to use.
Ugh…so often when private equity gets involved it’s the death knell because their goal is to suck as much money out of the company as possible then too often they then just let it fold.
I don’t have a Peloton but loved their app until they did the major price increase and you could only do 2 or 3 spin classes a month for the lower fee. Several of my friends dropped for the same reason. Yes, the classes and instructors were good, but not worth 2 or 3 times the price (esp when I also have a gym membership).
I’m a member of the peloton cult. Kendall is really the only “top” instructor leaving. Cody just renewed his contract. I also think they’re a tech company trying to be a manufacturer. I love it, and it has changed my life in many positive ways. I hope it stays afloat. I much prefer working out at home instead of a gym. Hell, I didn’t work out until peloton. There are always rumors of Apple buying them out, too. I hope they figure it out!
I love my Peloton! I wouldn’t say that instructors are leaving in droves. Kendall is a California girl and has made numerous comments about missing it. I too believe she has more conservative views as she made some questionable comments when going on vacation during the pandemic. She has been an advocate for mental health, so I wish her well, although she wasn’t my favorite. I don’t think it’s correct to theorize that the company is tanking because those three are leaving. Peloton has opened a lot of door for them and I think they just want to see what’s on the other side.
This is not good news. Private equity firms/corporate raiders strip companies for parts, shafting employees and customers in the process.
I love peloton and while I wasn’t happy about the price increase the value for money is still there. I do three strength classes a week, yoga and cycling through the winter and I never want to step foot in a brick and mortar gym again.
I’m sorry to see Kristen go but will not miss Ross or Kendall.
I loved peloton during the pandemic. But I had a really weird experience when trying to get back on a few years ago. It’s like I got the ick from it.
I think in a weird way it reminded me of the pandemic and how lonely I was at the time as someone who lived alone, but who once loved spin class. I couldn’t get on anymore and literally gave it to a friend.
I like that Peloton has shadowboxing, which is the only class of Kendell’s that I take. She comes across as try hard and fake so I’m not a huge fan of hers. I won’t miss her. I just hope they have Rad pick up more shadowboxing because I like taking it. I can’t stand Selena, she’s even more try hard than Kendell and I can’t even watch her.
I learned how to do yoga from Kristin McGee so I’m partial to her. She’ll land on her feet as she has a large following and celebrity clients. I don’t know who the other instructors are.
I love my Peloton bike and am just about to finish the affirm payments in August 😫 What timing. I loved spinning in studios but it was a luxury and the home spinning experience is so great. Buying the bike really saved me during covid and I don’t think I’ll take classes at a facility again in any regular way. But I’m not young, so maybe they need to get the youngs to stay competitive. I also love the strength classes and have cut arms just from doing the short workouts because they’re so efficient. I’ll be heartbroken if it goes away. Love Jess King, Tunde Oyeneyin, Alex Toussaint, Ben Alldis, Ally Love… basically all the electronic and house music instructors.
I went to a Peloton store a couple years ago. But I did not find the bike comfortable. And a work friend bought one. And the family didn’t like it. It was a nightmare to send back and get a refund for them. So that spooked me too.
I got a comfortable stationary bike and watch YouTube videos. While the pandemic was a boom for some areas. What comes up must come down at some point.
I love my peloton! Kendall had a weird vibe I never take her classes.