Anthony Geisler, CEO of Xponential Fitness, New York Stock Exchange
Source: New York Stock Exchange
shares of exponential fitnessThe company, the parent company of Cyclebar and Pure Barre fitness studios, announced late Friday that CEO Anthony Geisler has been suspended indefinitely with no return date and will become an inactive member of its board of directors. As a result, the stock rallied in trading on Monday.
The company’s shares have plunged nearly 30% since Friday, pushing its market capitalization below $500,000. The stock initially fell another 10% on Monday morning, but has since returned to positive territory.
Brenda Morris, who has served on the board since 2019, will serve as interim CEO.
Xponential Fitness, which owns more than 3,000 boutique fitness and wellness studios around the world, also said it received notice of the investigation by the U.S. Attorney’s Office for the Central District of California last week.
“In connection with the investigation, the requested information appears to largely mimic that of previously disclosed SEC investigations,” said Colin Wolfmeyer, an analyst at Piper Sandler. Piper Sandler maintains a “hold” rating on Xponential Fitness stock. However, he lowered his price target from $12 to $9. As of Monday, the stock was trading at about $9 per share.
Xponential Fitness management previously disclosed the findings of an SEC investigation in December that found the company provided false and misleading information to investors, including unit sales metrics and franchise closures. It was said that he did. Shareholders filed a class action lawsuit in February seeking monetary damages related to claims against the company.
“We intend to continue working with the SEC and will also work with the USAO,” Xponential Fitness said in a press release announcing the executive changes.
By: Xponential Fitness
Xpotential also reaffirmed its full-year 2024 guidance announced on May 2nd.
The company did not respond to requests for comment on the study.
“In our view, we are pleased that our financial objectives remain intact and Mr. Morris appears to be the right leader for the interim role,” Wolfmeyer said.
However, Wolfmeyer noted that the company remains cautious.
“Even after Friday’s withdrawal, we are still struggling to get this name back,” she added.
