Sachem Head, Soros liquidated positions in Peloton in first quarter-filings

© Reuters. FILE PHOTO: A stationary bicycle inside of a Peloton store is pictured in the Manhattan borough of New York City, U.S., January 25, 2022. REUTERS/Carlo Allegri

By Svea Herbst-Bayliss

BOSTON (Reuters) - Investment firms Sachem Head Capital Management and Soros Fund Management exited their positions in Peloton (NASDAQ:PTON) during the first quarter as the stock tumbled and the fitness company replaced its CEO, under pressure from an activist investment firm, regulatory filings made on Friday showed.

Peloton, which makes exercise bikes and treadmills and had become a market darling during the pandemic, faced heavy selling during the first quarter and into the second quarter as the pandemic eased and people returned to gyms.

Since January the stock price has tumbled 55% to close trading at $15.87 on Friday.

Sachem Head sold 1.65 million shares some time during the first quarter, the filing made late on Friday showed. The firm, which sometimes pushes companies to perform better, first invested in Peloton late in 2021 as the company's stock price was already falling. Soros Fund Management exited its position and sold 335,557 shares.

Activist investment firm Blackwells Capital, which owns roughly 5% of the company, began publicly pushing for changes in January. Within a few weeks the company said it hired Barry McCarthy, a former Spotify (NYSE:SPOT) and Nextflix executive, to replace co-founder John Foley as chief executive officer. Blackwells, which had pushed Peloton to sell itself, said in a recent presentation to it is still unhappy with management.

Both Sachem Head and Soros late on Friday released their 13-F filings which show what money managers held at the end of the first quarter. While the filings are backward-looking, they are closely watched for hints on potential trends and insight into what specific stocks managers liked or soured on.

Sachem Head also reported new positions in customer service platform Zendesk (NYSE:ZEN) as well as Momentive Global, the parent of SurveyMonkey, which Zendesk had planned to buy. Investors voted the deal down. Activist investment firm Jana Partners in February nominated four directors to sit on Zendesk's board and is pushing the company to review strategic alternatives and consider selling itself.

Sachem Head owned 1.8 million shares in Zendesk and 5.7 million shares in Momentive.