Peloton Jumps on CEO Departure, Job Cuts, Barry McCarthy to Take Top Spot

U.S. stocks were little changed ahead of another big day for earnings and economic news, while Peloton Interactive Inc. (PTON) shares are up more than 10% after the company announced job cuts and the departure of the CEO. The company also announced its new CEO: Silicon Valley veteran Barry McCarthy.

Among the companies reporting earnings today are BP Plc, Chipotle Mexican Grill Inc., DuPont de Nemours Inc. (DD), KKR & Co. Inc. (KKR), and Lyft Inc. (LYFT).

The yield on the 10-year Treasury note this morning crossed 1.96%, the highest level since 2019. Oil prices backed off seven-year highs, with light sweet crude just below $90 a barrel. Yesterday, the S&P 500 and the Nasdaq both ended lower, while the Dow was flat.

The National Federation of Independent Business released its Small Business Optimism Index for January, showing a slight loss of 1.8 points to a reading of 97.1, with over a fifth of small business owners identifying inflation as their greatest business problem.

Later this morning, the Commerce Department is expected to report the country's trade deficit widened further to $83 billion in December, after increasing to a deficit of $80.2 billion the month before. 

The price of Bitcoin hit a one-month high, briefly rising above $45,000, before falling to $43,500. The dollar strengthened versus the euro.

Quick Hits: Today's Headlines

Chipmaker Nvidia (NVDA) and SoftBank’s (SFTBY) Arm Holdings called off a $66 billion deal, amid regulatory hurdles. Instead, SoftBank will prepare to take Arm public in an initial public offering (IPO).

Pfizer is predicting record revenue this year, and expects $54 billion in sales from its COVID-19 vaccine and treatment pill. Pfizer's (PFE) stock price fell after the company beat analyst earnings estimates, but fell short on revenues.

BP’s profit hit an eight-year high as it promised another $1.5 billion in stock buybacks. Shares of BP (BP) have followed peers higher, up 60% over the past year.

Swedish price comparison firm PriceRunner AB says it is suing Alphabet Inc.'s Google (GOOG) for about $2.4 billion, the latest firm to take legal action alleging the search giant manipulated search results. In November, Google had lost an appeal against a $2 billion fine it received in 2017 which found using its own price comparison shopping service gave the company an unfair advantage over smaller European rivals. 

Amazon Inc. (AMZN) plans to more than double its base pay cap to $350,000, from its previous maximum salary of $160,000 for U.S. employees. The ecommerce giant will increase the overall compensation range for most jobs globally, and the company said the increases were much higher than in the past. 

The Big Story: Peloton Shake-up

Peloton CEO John Foley will reportedly step down, and the company will cut 2,800 jobs. Peloton shares rose nearly 6%; they had lost more than three-quarters of their value over the past year.

Foley will be replaced by Barry McCarthy, the former CFO of Spotify (SPOT) and Netflix (NFLX). Foley will remain as Executive Chairman of Peloton. A little over two weeks ago, activist investor Blackwells Capital had called for Foley to be fired and the company to be sold.

Peloton released its latest financial results early today amid reported takeover interest from a growing list of potential buyers including Amazon, Nike (NKE), or even Apple (AAPL) or Netflix.

Peloton slashed its its full-year revenue outlook to $3.7 billion from $4.4 billion as demand for its interactive fitness equipment slumps. Shares of Peloton jumped over 20% yesterday following reports about the takeover interest, but fell on the latest shake-up news. Peloton's stock price has fallen over 74% in the past year as consumers got off the bikes and headed back to gyms.

Foley and a group of insiders control over 80% of the stock, giving them voting power over any potential deal, according to securities filings.