Peloton insiders sold shares worth $500 million before the stock’s fall

• The company’s CEO and other executives sold millions of shares at prices over $100 a share before the stock fell

• CEO and co-founder, John Foley, sold $119 million worth of stock starting in November 2020

Filings with the Securities and Exchange Commission (SEC) showed that Peloton Interactive Inc. (NASDAQ: PTON) executives and insiders sold shares worth nearly $500 million before the stock dropped down drastically more than 80% from its highs last year.

The stock hit a 52-week low of $29.11 on Tuesday. CNBC reported that the company’s CEO and other executives sold millions of shares at prices over $100 a share in the months leading up to the big declines.

The connected-fitness company was originally added to the NASDAQ index in late December 2020. Shortly after, its market capitalization hit a record $48 billion. Today, Peloton is worth about $11 billion.

Also Read: Peloton will invest $400 million to build its first manufacturing unit in U.S.

CNBC reported that company executives and insiders sold $496 million worth of their shares in 2021. Virtually all of the sales were part of 10b5-1 plans, or prescheduled selling programs. It’s unclear how many of the sales were also linked to options exercises or options-related tax sales.

The profiteers

The company’s CEO and co-founder, John Foley, sold $119 million worth of stock starting in November 2020, according to SmartInsider. Among other executives selling stock were William Lynch, the company president, who sold more than $105 million in shares last year, with $72 million sold in February at an average price of $144.95. Co-founder and chief legal and culture officer, Hisao Kushi, Sold more than $90 million of his shares — most at prices above $110 a share.

Members of the board have also cashed out their holdings, including Karen Boone, who sold more than $20 million in stock last February at prices above $140 a share, reported CNBC.

Peloton initially saw a surge in business during the pandemic, as the demand for home-exercise products increased. Supply chain disruptions extended delivery times and limited the company's ability to meet the high influx of orders.

A product recall for its treadmill and concerns about demand in a post-pandemic world have contributed to the stock’s steep decline.

Read more: Peloton recalls treadmills amid concern over safety hazards

Inputs from CNBC

Picture Credits: Healthline