John Foley, former CEO of Peloton, disposes of $50 million in stock through Michael Dell's investment company.

• John Foley, co-founder and former CEO of Peloton, has sold approximately $50 million in stock to an investment firm backed by Michael Dell, MSD Partners, as per a securities filing.
• The sale involved about 1.92 million shares, the Wednesday filing said.
• After the sale, Foley retains sufficient stock to retain control of Peloton.

John Foley, co-founder and ex-CEO, sold approximately $50 million in stock to an investment firm backed by Michael Dell, MSD Partners, as per a securities filing.

The sale of approximately 1.92 million shares was disclosed in a Wednesday filing, but Foley retains enough ownership to maintain effective voting control of Peloton.

Barry McCarthy replaced Foley as CEO of Peloton in February, while Foley transitioned to executive chairman. McCarthy, a former executive at Netflix and Spotify, has stated that he and Foley will continue to collaborate closely.

During the Covid pandemic, Peloton experienced a decline in momentum for its connected fitness equipment and rising expenses due to a series of missteps and poor investments.

McCarthy was a board member of a blank-check company that was also backed by MSD Partners, which manages over $20 billion for the founder of Dell Technologies and other investors.

MSD Partners CEO Gregg Lemkau stated in an email, "Peloton is an exceptional brand and we are thrilled to support Barry McCarthy and the Peloton team as they position the business for long-term growth."

Foley made the decision based on his personal financial planning, according to a Peloton spokesman.

Last year, Foley disposed of nearly $100 million in stock, with most of his sales occurring at a price above $110 per share, according to securities filings.

Foley sold his stock to Dell at $26 a share, below the IPO price of $29, according to Wednesday's filing. Peloton shares have lost about 75% of their value in the past 12 months.

Activist Blackwells Capital, which owns less than 5% of the business, publicly criticized Foley's leadership and urged the company to consider a sale to a company like or before he stepped down as CEO. In a February slide deck, Blackwells accused the company of being "grossly mismanaged."

The activist highlighted the "excessive" selling by Peloton insiders when shares were trading near their highs.

In its presentation to Peloton's board last month, Blackwells stated that several executives had committed to selling their shares. However, this could pose a problem because it could result in forced stock sales during a margin call, which could further decrease the stock price.

Whether Foley was facing a margin call with this most recent sale is unclear.