Value in 60 Seconds: Malinvestment - zombie stocks stealing from investors (PTON 2022 exec comp)

24 Jul 2023 · 1 min

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1:12

In a brief commentary, the speaker denounces Peloton’s executive compensation as a textbook case of malinvestment and corporate misgovernance. He references a recent interview with Adam Taggart at Wealthion, then highlights that Peloton’s CEO, Barry McCarthy, received roughly $150 million in compensation despite the company’s status as a cash‑burning, non‑profitable “zombie” stock. The speaker argues that this massive payout exemplifies a misallocation of shareholder capital, a broken compensation committee, and an unjust transfer of wealth from many shareholders to a single executive. He calls for severe accountability, even suggesting criminal consequences for those responsible.

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Malinvestment. We talked a lot about that last week on my interview with Adam Taggart at Wealthion. What better example than Barry McCarthy, the CEO of Peloton, making over $150 million last year? Peloton, in case you don't know, zombie stock burning cash like crazy. Never made a single dollar of profit, but they found a way to pay their CEO $150 million. If that is not an example of misallocation of capital and an example for any of you that had even thought about owning Peloton, why you don't want to trust what Wall Street says, I don't know what is. Peloton's taking shareholder money and giving it to this one guy. Talk about taking money out of the pockets of the many into the pockets of a few or one. One of the most egregious examples. of corporate misgovernance, malinvestment, a compensation committee breaking down. People should go to jail over this as far as I'm concerned. And maybe they will someday.