'I'm focused on doing exactly the opposite and exploring how much price elasticity there is for the business,' Peloton CEO Barry McCarthy told Jim Cramer.
"I think there's enormous opportunity for us to flex the business model and dramatically increase the [total addressable market] for new members by lowering the cost of entry and playing around with the relationship between the monthly recurring revenue and the upfront revenue," McCarthy said.
"So, no. I'm not focusing on raising prices. I'm focused on doing exactly the opposite and exploring how much price elasticity there is for the business," said McCarthy, whose past stops at subscription-service innovators Spotify and Netflix are seen as valuable to his role at Peloton. Peloton saw tremendous growth during the Covid pandemic, but has seen demand for its exercise machines wane as, which has led to temporary production halts. Along with installing McCarthy as CEO, the company also laid off roughly 20% of its corporate workforce in an effort to control costs.
While there have been press reports suggesting Peloton is a potential takeover target, McCarthy told Cramer he sees a promising path forward for the company. That's what motivated him to, essentially, come out of retirement for the job, he said.
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