Peloton’s Surprise Shake-Up Triggers Record-Setting Rally (2)

A surprise shake-up at Peloton Interactive Inc. sent the shares on their biggest one-day rally ever Tuesday and renewed speculation that the ailing fitness company could be a takeover target.

Peloton co-founder John Foley will step down as chief executive officer and become executive chairman, the company said, part of sweeping changes that include job cuts and the canceling of a proposed factory in Ohio. Barry McCarthy, former chief financial officer at Spotify Technology SA, will become CEO and president, effective Feb. 9.

Barry McCarthy

Photographer: Michael Nagle/Bloomberg

The stock surged 25% to $37.27 on the news, with investors betting that ...