By Svea Herbst-Bayliss

BOSTON, (Reuters) – Peloton Interactive (NASDAQ) Inc’s founder and leader is being criticized by its chief executive officer. He claims he hasn’t made sufficient changes to the company and should be selling it now.

Blackwells Capital owns almost 5%. They claim that Peloton failed to fulfill its promises and too many insiders (including John Foley) continue to direct the company’s moves.

Peloton became a market favorite during the COVID-19 pandemic, when people were flocking to their treadmills, bikes, and streamed workouts. Former Netflix executive Barry McCarthy was hired as its CEO by Peloton to replace Foley.

Blackwells presented Wednesday’s presentation, claiming that McCarthy’s new management has not made “meaningful” changes to the company and that shareholder value has plummeted by nearly $2B since McCarthy took office.

Peloton’s stock prices have fallen almost 40% since McCarthy was appointed. They had previously been subject to pressure due to people returning from gyms following the pandemic. It is worth $7.8billion, compared to nearly $50bn at the peak of its popularity during the pandemic. After the presentation, the stock price rose 3% to $24.45

Jason Aintabi is the founder of Blackwells. He stated that the $800 million cost reduction plan did not seem sufficient and that it was possible to “further rationalize” the company.

Aintabi also condemned Foley for his February sale of approximately $50 million worth Peloton stock, to Michael Dell’s MSD Partners at an 12% discount. This move “exacerbates disalignment with shareholders”, the presentation stated.

Peloton needs to be sold, Aintabi stated again. The sale could fetch at least $75 per share and include companies such as Apple (NASDAQ), Amazon (NASDAQ), Google (NASDAQ), Netflix, and Google (NASDAQ). Nike Aintabi stated that Peloton (NYSE:) has complementary businesses.

According to the presentation, “To achieve a comparable share price for Peloton it will likely take years through acquisitions of millions more subscribers.”

Peloton didn’t immediately reply to our request for comment.