Raphael Stevens

“The nature of turnarounds is they are full of surprises,” Peloton CEO Barry McCarthy told analysts on Tuesday, during his first earnings conference call at the company.
After digging into the business when he joined about three months ago, the CEO said he learned that Peloton was “weaker on everything supply chain” than he had expected.
Shares of Peloton fell to an all-time low Tuesday.

Barry McCarthy, chief financial officer at Spotify, attend annual Allen & Company Sun Valley Conference, July 11, 2018 in Sun Valley, Idaho.
Drew Angerer | Getty Images

When Barry McCarthy showed up to run Peloton about three months ago, he was surprised to learn just how discombobulated the supply chain was and how quickly the company’s cash coffers were shrinking.
“The nature of turnarounds is they are full of surprises,” McCarthy told analysts on Tuesday, during his first post-earnings conference call with Peloton.

After digging into the business, the CEO said he learned that Peloton was “weaker on everything supply chain” than he had expected. He said the biggest surprise during the previous quarter was cash flow, and how bleak it was.
Yet the former Netflix and Spotify executive also said he was surprised by Peloton’s ability to “quickly address” its cash flow situation without diluting existing shareholders and while continuing to adequately capitalize the business. Another bright spot noted by McCarthy was that he found more talent within Peloton’s headquarters than he thought he would discover.
McCarthy’s comments to Wall Street on Tuesday were incredibly high stakes, given Peloton’s diminishing share price and waning confidence among investors that the business can be successful in a post-Covid pandemic world.
The CEO’s letter to shareholders Tuesday came with disappointing results for the three-month period ended March 31 and a grim outlook for the current quarter, which ends on June 30 and marks the finish of Peloton’s fiscal year. McCarthy was quick to call out areas where former Peloton management had not been so successful, while laying the groundwork for his turnaround goals.
At least for now, investors are more focused on the current sour state of things. Peloton shares sunk to an all-time low Tuesday, dragging the company’s market valuation down to about $4 billion. It had been as high as $50 billion near the start of last year.

Still, McCarthy ended the conference call by telling Wall Street that he’s “pretty optimistic” about the company’s path forward, “notwithstanding the stock price.”
“I don’t mean to sound Pollyannaish, but I’m hopeful that someday soon we’re going to look back on this call as one of the important turning points in the business,” he said.

A shift in priorities

On McCarthy’s check list are:

Breaking into third-party retail by selling Peloton products through other businesses
Growing awareness of the company’s digital app, which can be an option for people who don’t want to commit to a Bike or Tread machine
Expanding internationally
Rolling out more widely a pilot test where customers pay a flat rate to rent one of Peloton’s stationary bikes and access its live and on-demand workout classes

“We need to be good at hardware, but being good at hardware is not nearly sufficient,” he said on the call. “And that calls for a shift in the investment priorities of the business.”
He also, importantly, aims to turn the business back to free cash flow positive in its upcoming fiscal year.
A recent cash infusion from JPMorgan and Goldman Sachs should allow it do to this, McCarthy said, in spite of any economic headwinds. According to his letter, Peloton ended its latest quarter “thinly capitalized” with $879 million in unrestricted cash and cash equivalents.
Many investors will likely have pause, though, until they’re able to witness greater signs of progress. Some also worry that Peloton could lose a fraction of its existing subscriber base — which has proven loyal during the pandemic — if they change too much and too soon.
UBS analyst Arpine Kocharyan said he expects Peloton investors are going to be more concerned in the short-term with the company’s ability to preserve its cash flows and liquidity. Peloton’s strategy under McCarthy is to put greater focus on the net present value of the subscriber, versus a prior focus on hardware profits, Kocharyan said in a note to clients.
Other analysts are questioning whether McCarthy’s strategy is really that different from that of Peloton co-founder and former CEO John Foley.
Peloton enjoyed success under Foley, who led the connected fitness equipment maker through the height of the pandemic. But it also experienced challenges as consumer demand started to fade but costs still mounted and Peloton had made investments in things, such as additional manufacturing hubs, that it no longer needed.
“The company continues to suggest with their words that they know they need to turn around,” said BMO Capital Markets analyst Simeon Siegel. “And yet they’re holding onto this notion that their growth story is their North Star.”
“If the company would simply work on selling their existing inventory and focusing on bear hugging their existing loyalists, there should be a reasonable path to profitability,” he added. “The issue is that story gets clouded with the belief that they’re entitled to grow as far and as fast as they want.”
McCarthy reiterated Tuesday that Peloton’s goal is to one day count 100 million members, a goal that Foley laid out in 2020.
“I know of digital apps that already have more than 100 million people that are focused on fitness. And I can’t for the life of me think why, given our success early in the category, that we couldn’t be one of those digital apps,” McCarthy said.
Peloton had 7 million subscribers as of March 31.

WATCH LIVEWATCH IN THE APP More

The U.S. homicide rate from gun violence rose 35% in the first year of the pandemic to the highest level since 1994, according to the CDC.
Excluding suicides, more than 19,000 people were killed by guns in 2020 compared with more than 14,000 the year prior, according to the CDC report.
Homicides from gun violence increased among people of every age, in most racial groups, for men and women, in cities and in rural areas, and in every region of the nation.
Black Americans suffered the most with the homicide rate from gun violence increasing nearly 40% to 26.6 per 100,000 people, about 12 times higher than the rate among white Americans.

Mike Blake | Reuters

Gun homicides in the U.S. reached their highest level in more than 25 years during the Covid-19 pandemic, according to the Centers for Disease Control and Prevention.
Homicides from guns rose 35% during the first year of the pandemic to the highest level since 1994, according to a CDC Morbidity and Mortality Weekly report published Tuesday. The homicide rate from firearms increased to 6.1 per 100,000 people in 2020 compared with 4.6 per 100,000 in 2019.

Excluding suicides, more than 19,000 people were killed by guns in 2020 compared with more than 14,000 the year prior, according to the CDC report, which is based on death certificates. The study did not include accidental gun deaths or deaths where intent could not be determined.
Homicides from gun violence increased among people of every age, in most racial groups, for men and women, in cities and in rural areas, and in every region of the nation.
Black Americans suffered the most with the homicide rate from gun violence increasing nearly 40% to 26.6 per 100,000 people or nearly 12,000 total, about 12 times higher than the rate among white Americans. The disparity was even larger among boys, with the firearm homicide rate 21.6 times higher among Black males ages 10 to 24 compared with white males of the same age.
Gun homicides rose 27% to 8.1 per 100,000 people among Native Americans, nearly 26% among Hispanics to 4.5 per 100,000, and about 28% among whites to 2.2 per 100,000. The firearm homicide rate decreased 4.2% among Asian Americans to 1 per 100,000 individuals.
Separately, suicides involving a firearm increased 1.5% to 8.1 per 100,000 people during the first year of the pandemic. The suicide rate with guns was the highest among Native Americans at 10.9 per 100,000 and whites at 10.4 per 100,000 people.

The homicide rate from guns was more than five times higher among men than women, and in terms of age gun killings were highest among those 25 to 44-years-old.
In the U.S., 79% of homicides and 53% of suicides involved guns in 2020, according to the CDC. More than 24,000 suicides involved firearms in 2020.
Killings and suicides with guns were closely associated with poverty, according to the study. The counties in the U.S. with the highest poverty rates suffered firearm killing and suicide rates that were 4.5 and 1.3 times higher, respectively, than counties with the lowest poverty levels. Blacks, Hispanics and Native Americans were more likely to live in counties with higher poverty rates, according to the CDC.
While the study did not investigate the reasons for the dramatic increase in firearm homicides, the CDC said the pandemic may have played a role by disrupting social services, schools, work and housing as well as the increase in social isolation.
The pandemic resulted in millions of people losing their jobs, with the unemployment rate hitting 14.7% at the height of the crisis in April 2020. The economic downturn hit minority communities, particularly Black Americans, especially hard. It was also a year of historic social unrest, with the murder of George Floyd, a Black man, by a white Minneapolis police officer leading to nationwide protests.
If you or someone you know is in crisis, call the National Suicide Prevention Lifeline at 800-273-8255.

CNBC Health & Science

Read CNBC’s latest global coverage of the Covid pandemic:

WATCH LIVEWATCH IN THE APP More

Citadel founder Ken Griffin placed the winning $8 million bid in an auction Monday for a seat on a spaceflight with Jeff Bezos’ Blue Origin.
Bezos’ company donated two seats for a “buy one, give one” auction at the nonprofit Robin Hood’s annual benefit for New York City
Griffin, Blue Origin and New York City’s Department of Education will select two teachers to take the spaceflight.

Ken Griffin, Founder and CEO, Citadel (L) and Blue Origin New Shepard rocket lifts off (R)

Ken Griffin, billionaire founder and CEO of hedge fund Citadel, placed the winning $8 million bid in an auction Monday for a seat on a spaceflight with Jeff Bezos’ Blue Origin.
Bezos’ company donated two seats on its New Shepard rocket for a “buy one, give one” auction at the nonprofit Robin Hood’s annual benefit for New York City, with the second seat going to a city teacher.

But Griffin will not launch to space himself, instead giving back his seat so that two educators can fly.
A Robin Hood spokesperson told CNBC that the organization will partner with Griffin, Blue Origin and New York City’s Department of Education to select the two teachers for the spaceflight, saying an announcement about the “process and timeline” is coming soon.
A Blue Origin spokesperson added the timing for the New Shepard launch is not set and that the company is not planning to auction off the flight’s remaining four seats.
Blue Origin’s New Shepard rocket launches from the company’s private facility in West Texas and flies beyond 100 kilometers altitude, or about 340,000 feet, where the crew experiences about two minutes of weightlessness before returning to Earth.
Notably, Griffin’s bid is $20 million less than the winning bid of an auction that Blue Origin held for a seat on its inaugural New Shepard flight last year — although that ticket came with a ride along with Bezos himself.

WATCH LIVEWATCH IN THE APP More

Netflix could roll out its lower-price, ad-supported tier as early as this year, a source familiar with the matter told CNBC.
That would put it on a much faster track than the company originally indicated.
Netflix is also expecting to start cracking down on password sharing in that same time period.

Reed Hastings, co-founder, chairman, and co-chief executive officer of Netflix, arrives for the annual Allen and Co. Sun Valley media conference in Sun Valley, Idaho, U.S. July 6, 2021.
Brian Losness | Reuters

Netflix could roll out its lower-price, ad-supported tier as early as this year, a source familiar with the matter told CNBC.
Netflix executives told employees in a note they were working to introduce the tier by the last three months of 2022. That would put it on a much faster track than the company originally indicated. During Netflix’s most recent earnings conference call, co-CEO Reed Hastings said the company was still figuring out the model and an ad-supported option wouldn’t be available on the service for a year or two.

But Netflix has struggled with a stagnating subscriber base and a plunging stock, down more than 70% year to date. An ad-supported tier could help attract and retain price-conscious consumers.
Netflix is also expecting to start cracking down on password sharing in that same time period.
The company said last month it estimates more than 100 million households globally use a shared password to access its content — 30 million of those in the U.S. and Canada. That’s contributed to revenue and subscriber growth headwinds, it said.
The New York Times first reported the accelerated timeline for the changes Tuesday. A Netflix spokesperson declined to comment.
Subscribe to CNBC on YouTube.

WATCH LIVEWATCH IN THE APP More

A stock market downturn may be a prime opportunity for a Roth individual retirement account conversion, experts say.
However, you need to weigh the pros and cons, including upfront taxes, and how boosting your income may trigger other consequences.

Morsa Images | E+ | Getty Images

Soaring inflation, interest rate hikes and the war in Ukraine have sparked ongoing stock market volatility. But there may be a bright spot: the chance to save money on a Roth conversion.
The strategy allows higher earners to sidestep the earnings limits for Roth individual retirement account contributions, capped at $144,000 modified adjusted gross income for single investors and $214,000 for married couples filing together in 2022.

Here’s how it works: Investors make what’s known as non-deductible contributions to a pre-tax IRA before converting the funds to a Roth IRA, kickstarting tax-free growth.

It’s almost like getting that Roth IRA on sale.

Ashton Lawrence
Partner at Goldfinch Wealth Management

The trade-off is that Roth conversions trigger an upfront tax bill on contributions and earnings. The bigger your pre-tax balance, the more you’ll owe for the conversion.
And the latest stock volatility may be an opportunity for investors eyeing a Roth conversion, said certified financial planner Ashton Lawrence, partner at Goldfinch Wealth Management in Greenville, South Carolina. 
“It’s almost like getting that Roth IRA on sale,” he said. 
More from Personal Finance:This strategy may help avoid running out of money in retirementAmericans say inflation may have a ‘negative impact’ on goalsAs stocks tumble, this tax play offers a silver lining

For example, let’s say you have a pre-tax traditional IRA worth $100,000, you like the investments and when the entire market goes down, the value drops to $65,000. You can save money by converting $65,000 rather than the original $100,000.
Major stock market averages have dropped for the past five weeks, dipping on Tuesday morning after three days of heavy selling.
During the first quarter of 2022, Roth conversions were up by 18% compared to the first quarter of 2021, according to data from Fidelity Investments.

Upfront tax bill

While a Roth conversion during a stock market dip may seem appealing, experts say the decision involves more than asset values alone.
Marianela Collado, a Plantation, Florida-based CFP and CPA at Tobias Financial Advisors, says you need to consider how many years it will take to break even on that upfront tax bill.
You’ll also need to weigh combined balances across IRA accounts, because of the so-called “pro-rata rule,” which factors in your total pre-tax and after-tax funds to calculate your bill.
“It’s one of those things that you can’t look at in a vacuum,” Collado added.

The five-year rule

What’s more, while Roth IRAs typically offer tax- and penalty-free withdrawals anytime for contributions, there is an exception for conversions known as the “five-year rule.”
Investors must wait five years before they can withdraw converted balances, regardless of their age, or they will incur a 10% penalty. The timeline begins on Jan. 1 on the year of the conversion.

Boosting adjusted gross income

Another possible downside of a Roth conversion is the potential to increase that year’s adjusted gross income, which may trigger other issues, Lawrence said.  
For example, Medicare Part B calculates monthly premiums using modified adjusted gross income, known as MAGI, from two years prior, which means 2022 income may create higher costs in 2024. 
The base amount for Medicare Part B in 2022 is $170.10 per month, and payments increase once your MAGI passes $91,000 or $182,000 for joint filers.
For 2022, the top Medicare Part B surcharge is $578.30 once MAGI exceeds $500,000 for single filers or $750,000 for couples filing together.
“It’s like a balloon,” Lawrence explained. “If you squeeze it at one end, you’re going to inflate it somewhere else.”

WATCH LIVEWATCH IN THE APP More

Tom Brady will join Fox Sports as the broadcast network’s lead NFL analyst whenever he chooses to retire, Fox CEO Lachlan Murdoch said Tuesday.
Brady briefly retired earlier this year only to change his mind 40 days later.
Brady has agreed to a “long-term” deal with Fox and will call games with play-by-play announcer Kevin Burkhardt.

Tom Brady of the Tampa Bay Buccaneers waves to fans at Raymond James Stadium in Tampa, Florida, on Sept. 9, 2021.
Julio Aguilar | Getty Images

Tampa Bay Buccaneers quarterback Tom Brady has agreed to join Fox Sports as the broadcast network’s lead National Football League analyst when his career concludes, Fox Chief Executive Officer Lachlan Murdoch said Tuesday.
“We are delighted that Tom has committed to joining the Fox team and wish him all the best during this upcoming season,” Murdoch said in a tweet. He also announced the news during Fox’s earnings conference call.

Brady responded on Twitter, emphasizing his playing days aren’t over yet.
“Excited, but a lot of unfinished business on the field with the @Buccaneers #LFG,” Brady tweeted.
Brady, who will turn 45 in August, has agreed to a “long-term” deal with Fox and will provide color commentary for games called by lead play-by-play announcer Kevin Burkhardt, Fox said. He has also agreed to “serve as an ambassador for us, particularly with respect to client and promotional initiatives,” the company said.
Brady briefly announced his retirement earlier this year only to change his mind 40 days later. He hasn’t said how long he plans to continue to play in the NFL. Brady has won seven Super Bowls with the New England Patriots and Buccaneers.
Fox’s longtime lead broadcasting duo of Joe Buck and Troy Aikman said earlier this year they were leaving the network to join ESPN as the cable network’s new Monday Night Football TV announcers.

There has been widespread turnover among broadcasters this NFL offseason, with Al Michaels departing NBC’s Sunday Night Football to call Amazon Prime Video’s Thursday Night Football games, Mike Tirico, who left ESPN in 2016 for NBC, succeeding Michaels, and Burkhardt replacing Buck as Fox’s lead voice.
Disclosure: NBC Sports, which shares parent NBCUniversal with CNBC, broadcasts NFL games.
Clarification: This story has been updated to clarify that Mike Tirico left ESPN in 2016 for NBC.
WATCH: Brady changes his mind, will return to Bucs

WATCH LIVEWATCH IN THE APP More

Manchester City have activated the Norwegian’s release clause.
Including agents fees and other add-ons City will pay £85.5m in total.
Haaland will join City on July 1st.

Haaland has scored 85 goals in 88 matches for Dortmund since joining from RB Salzburg in January 2020.
Matthias Hangst | Getty Images Sport | Getty Images

Manchester City have confirmed an agreement to sign Borussia Dortmund striker Erling Haaland for £51.1m.
City have paid the 21-year-old’s release clause and expect to pay £85.5m in total when agent fees, signing bonus and other costs are taken in to account.

Haaland will join City on July 1st, subject to the club finalising terms with the player.
Sky Sports News reported that the 21-year-old completed his medical on Monday at Hospital Erasme in Brussels.
Manchester City CEO Ferran Soriano informed Dortmund boss Hans-Joachim Watzke last week that City were ready to activate the striker’s release clause and the two clubs have moved quickly to conclude a deal.
Haaland has scored 85 goals in 88 matches for Dortmund since joining from RB Salzburg in January 2020. Dortmund’s last game of the season is Saturday’s home match against Hertha Berlin.
Asked about the deal to sign the Norwegian at his press conference on Tuesday, Guardiola said: “Everybody knows the situation.

“Borussia Dortmund and Manchester City have told me I am not allowed to say anything until the deal is completely done. I cannot talk, I am sorry. We will have time to talk.”
Klopp: Haaland deal will “set new levels”
Liverpool manager Jurgen Klopp believes the Haaland deal will “set new levels” in the transfer market, with the summer window officially opening on June 10.

In an exclusive interview with Sky Sports News, he said: “I signed a new contract knowing that City would not stop developing. It’s not about City to define if we can be happy or not, it’s about us and what we can make of it.
“You have so many opportunities and so many different ways to win a football game, and we have to find just one. It’s possible obviously and we can do that.
“We face City two, three – with cup competitions, the Champions League – five, six times maybe a year but not more often than all the rest.
“If Erling Haaland goes there, it will not weaken them, definitely not. I think there’s enough spoken about this transfer. I know there is a lot of talk out there about money, but this transfer will set new levels, let me say it like this.”
Dortmund to replace Haaland with Adeyemi
Dortmund are set to sign Red Bull Salzburg striker Karim Adeyemi as Haaland’s replacement.
The 20-year-old has scored 23 goals in 42 games this season while also adding eight assists.

WATCH LIVEWATCH IN THE APP More