Peloton was one of the best-selling items on the market during the pandemic. But as the threat of Covid-19 subsided, so did the fitness equipment maker's shares – and its former billionaire CEO John Foley says he lost his wealth in the process.
“You know, at one point I had a lot of money on paper,” Foley, who co-founded Peloton in 2012 and remained at its helm for a decade, explained. New York Post,
“Not really [in the bank]Unfortunately. I have lost all my money. I have had to sell almost everything in my life.”
When demand for at-home workouts surged in the early days of COVID-19, Peloton sales increased by 250%, the stock surged more than 400%, and Foley became an overnight billionaire.
But as pandemic restrictions were lifted and people began exercising outside again, the company overestimated demand.
By November 2021, Peloton’s stock had fallen drastically and Foley had lost his newfound 10-figure status.
Then, in December 2021, the premiere episode “And Just Like That…” of the “Sex and the City” reboot killed off one of its main characters, Mr. Big, who had a heart attack while riding a Peloton.
“We were coming out of COVID. Stocks were dropping. And then the Mr. Big thing happened … it was brutal,” he recalled. “All of a sudden, we just started getting trolled … everything was collapsing.”
The New York-based company, which once had a staggering $50 billion in assets, was busy maintaining its unicorn status when Foley stepped down as CEO in February 2022. According to Bloomberg, Foley was once worth $1.9 billion, but he left the company with a net worth of $225 million.
The company has since hired another CEO, Barry McCarthy, laid off thousands of workers, raised prices, and announced the closure of retail stores to deal with the collapse in demand following the pandemic.
Its market capitalization is still much lower than before, currently standing at $1.8 billion.
Luck Foley has been contacted for comment.
Peloton's stock massacre destroyed more than Foley's billionaire status
It’s not just Foley’s billionaire status (and his career at the company he built) that was destroyed by the massive drop in Peloton’s stock price.
The former Peloton chief has been forced to downsize twice — including selling his East Hampton waterfront home for $55 million and moving his family out.
“My family took it well,” the 53-year-old explained. NY Post“My wife is very supportive. My kids will probably be better off if we keep it real.”
Although Foley lost most of his wealth, this difficult situation did not put an end to his ambition.
Within a year of resigning from the top job at Peloton, he had raised $25 million for his new venture, a direct-to-consumer rug company called Ernesta.
Now, he believes the company can generate up to $500 million in free cash flow by 2030.
“I'm working hard so I can try to make money again … because I don't have much left,” Foley concluded. “And so I'm hungry and humble.”
'There is nothing real about it'
As Foley's experience shows, achieving billionaire status can be pretty meaningless if that wealth is only on paper and tied up in stocks that can't easily be sold.
After being named Britain's youngest billionaire, Gymshark founder and chief executive Ben Francis said “none of this is real”, adding that his wealth is “all on paper” and linked to assets whose value can fluctuate.
“It could be double, it could be [halve]” the millennial entrepreneur added. “So I think it's important that no one ever bases their self-worth on money, net worth or anything financial.”
That's why, in his eyes, defining your success by your net worth is “a very unproductive way to live life.”