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John Foley, the co-founder and former chief executive of Peloton Interactive (NASDAQ:PTON) was reported issued repeated margin calls on loans he borrowed against his Peloton holdings, the Wall Street Journal reports.
Foley left Peloton’s board last month as the company’s new leadership races to stage a business turnaround. Goldman Sachs told Mr. Foley on several occasions to provide fresh funds or additional collateral for his loans, the report added.
However, Mr. Foley insists that margin calls weren’t the reason why he left the company he co-founded, although such a move did provide him with more room to maneuver.
“I didn’t resign from the board because I was underwater,” Foley was quoted saying by the WSJ.
“To the extent that I took on debt through Goldman, it was because I am bullish on Peloton and still am. It was and is a great company.”
Mr. Foley reportedly pledged as collateral about 20% of his stake at the time, which was worth about $300 million a year ago. These days, these shares are worth 90% less. Mr. Foley ultimately managed to secure private financing and avoid stock sales by the bank.
“Everyone can see I had a rocky year,” Mr. Foley added. “This was not a fun personal balance-sheet reset.”
John and his wife Jill Foley, a former Peloton executive, now own 6.6 million shares and options on another 8.4 million. These holdings are together worth less than $100 million.
