Peloton CEO John Foley’s net worth plunged by US$400 million on Thursday (November 4) after the company said it expected to bring less revenue next fiscal year following its weaker-than-expected quarterly earnings.
Peloton, known for its internet-connected stationary bicycles, fitness equipment and subscription-based workout routines, saw its shares plummet 24 per cent on Thursday. On the next day, it is reported that Foley’s overall net worth dropped to less than US$1 billion, essentially taking him off the billionaire list after first appearing in April this year with a net worth of US$1.5 billion.
The company had reported a net loss of US$376 million for a three-month period that ended on September 30 with revenues of US$805 million. Its subscriber growth is also slowing. The drastic fall in demand for the company’s products and services shows that there is a shift in consumers’ behaviours. People are more inclined to leave their homes and prefer the outdoors now.
In a report by the Financial Times, it is said that the largest economy in the world added over 500,000 jobs in October. As the country gradually lifts its restrictions, more people are heading out after months of staying at home — either to catch up with family and friends or are just looking for a new environment beyond their homes.
This means that demand for home-based services is expected to fall just like what is seen with Peloton. Other companies that thrived during the height of the pandemic for offering similar services also faced a drop in demand like online teleconferencing company Zoom, online education platform Chegg and online TV platform Roku.
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A year ago in the same period, Peloton made a US$69.3 million net profit. Peloton added it saw the lowest number of subscribers this quarter since it went public in 2019 according to the Wall Street Journal.
In other news about billionaires, basketball superstar Michael Jordan is now the highest-paid athlete of all time. The retired Chicago Bulls player has amassed US$2.62 billion, where most of his earnings are a result of brand deals and endorsements. His time on the court only contributed six per cent of his total net worth.
Elon Musk, who has become the richest man alive was called out by the director of the World Food Program to use a “fraction” of his wealth to help solve world hunger. Musk challenged him to explain how US$6 billion will help world hunger. If successful, Musk claims he will sell the same amount of Tesla stock and contribute to the cause.
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