David Einhorn’s DME Capital Management completely exited its stake in Peloton Interactive (NASDAQ: PTON) during the second quarter of 2026. The fund sold 10,113,940 shares, wiping out a position worth $43.4 million at the end of the prior quarter.

This exit follows a volatile trading history for the hedge fund. DME Capital had increased its holding by 4,004% in the fourth quarter of 2025, building a position of over 10 million shares from just 246,460. However, it subsequently reduced the stake by more than 90% in the second quarter of 2025 and by 52% in the first quarter of 2025 before the final exit.

Congressional Activity

While Einhorn exited, Rep. Maria Elvira Salazar (R-Fla.) disclosed buying between $2,000 and $30,000 in Peloton shares on March 19, 2026. This marks her return to stock trading after making no purchases in 2025. Since 2022, Salazar has executed over 100 transactions totaling more than $8.5 million.

What the Numbers Show

Peloton’s recent financial performance highlights operational headwinds. The company reported fourth-quarter earnings per share of 13 cents, which met analyst estimates. However, full-year revenue guidance of $2.3 billion to $2.4 billion falls short of the $2.44 billion reported in the prior fiscal year. Additionally, connected fitness churn doubled from 1.1% to 2.2%, with management forecasting subscriber losses in the first quarter.

Market Reaction

Peloton stock trades at $5.36, down 28.6% over the last 52 weeks. The shares are within their 52-week range of $3.65 to $9.20. Einhorn had previously cited cost-cutting and EBITDA growth as potential value drivers, but the complete exit suggests these factors have not materialized to his satisfaction.

Peloton Interactive (NASDAQ: PTON) reported fourth-quarter earnings per share of $0.13, beating the analyst consensus estimate of $0.12 by 8.33 percent, but warned of accelerating subscriber losses as connected fitness churn rose to 2.2 percent in Q4 from 1.2 percent in Q3. The company guided first-quarter ending subscriptions to between 2.455 million and 2.475 million, a decline of 9.8 percent year-over-year. This update highlights significant headwinds in the recurring revenue base despite the quarterly earnings beat.

The earnings beat was driven by improved profitability metrics relative to the prior year. While revenue growth remained modest, with total sales of $608.000 million beating estimates of $597.832 million by 1.70 percent, the substantial jump in EPS indicates effective cost management. However, the rising churn rate and downward revision in subscription guidance suggest underlying weakness in the core business model.

Financial Performance Overview

Subscription Trends and Churn

The divergence between financial stability and user engagement is stark. While total sales increased marginally by 0.18 percent over the previous year’s $606.900 million, revenue from Connected Fitness Products fell 14 percent to $171.1 million. More critically, the churn rate for connected fitness subscriptions more than doubled from 1.2 percent in Q3 to 2.2 percent in Q4.

Looking ahead, Peloton expects ending subscriptions for Q1 to range between 2.455 million and 2.475 million. This represents a 9.8 percent decline year-over-year, signaling continued pressure on the company’s high-margin recurring revenue stream. Investors must weigh the short-term earnings beat against these deteriorating engagement metrics.

What the Numbers Show

The combination of flat top-line growth, a 14 percent drop in hardware revenue, and a doubling of churn rates suggests that Peloton’s recent profitability gains may be driven by cost-cutting rather than organic demand strength. The 9.8 percent year-over-year decline in expected Q1 subscriptions underscores the challenge of retaining users in a competitive market. If churn remains elevated, the current margin improvements could be unsustainable without new subscriber acquisition or pricing power.