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Beachbody Rebrands Itself After Nearly 2 Years of Disappointing Performance

The Popular Fitness Company Ditched It’s Flagship Name

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Beachbody has been a household name for nearly a quarter of a century, but now the company is ditching its famous title in a controversial rebrand.

The popular fitness company blasted onto the home fitness scene in 1998 and their initial rise to success was driven by their use of late-night infomercials.

These commercials encouraged people to buy their fitness programs as a solution to their ever-growing waistlines — a solution that worked.

Since then Beachbody has generated world-wide fame for programs such as P90X, Insanity, and The 21 Day Fix.

Tech Innovations

Always adapting to change, in 2016 CEO Carl Daikeler was one of the first to implement a streaming application, phasing out their once popular DVD program packages.

Daikler himself had said that he wanted to create “the Netflix of fitness”. In just a matter years, Beachbody experienced a meteoric rise in subscriptions due to the introduction of Beachbody On-demand.

Later, the world would be introduced to many new connected fitness competitors — such as luxury brand, Peloton.

SPAC Anticipation

In 2021 it was announced that Beachbody would seek to go public on the New York Stock Exchange via a SPAC named Forest Road Acquisition Corp.

From about 2019 to mid 2021 Special Acquisition Corporations (SPACs) were a popular path for private business to take to go public.

SPACs allow companies to avoid all the red tape of the IPO process, and they are able to go public in a fraction of the time. However, they are generally considered more risky than an IPO.

SPACs are also appealing because it allows companies to merge with a shell corporation created by investors, often increasing available capital.

This was the case with the Forest Road — they brought $300 million to the table.

3 Way Merger

If you thought that it was just Forest Road and Beachbody that were involved in this SPAC, you’d be mistaken.

Actually, this transaction was considered a three-way merger between Forest Road, Beachbody, and Myx Fitness.

The plan was to merge three ways into a new entity called The Beachbody Company.

The Beachbody Company (NYSE: BODY) was set to be the parent company of Beachbody, Myx Fitness, and OpenFit.

Backed by the likes of Tom Staggs (former Disney executive), Kevin Mayer (former Disney executive), Shaq, and Martin Luther King III, many investors were very excited —so excited that they even dubbed it, “the Shaq SPAC”.

MLM Controversy

What investors didn’t count on, and what the SPAC team themselves may have overlooked was the negative connotation with the Beachbody name.

Retail investors and customers alike were confused and could not differentiate between Beachbody as a division and The Beachbody Company as a parent company.

The confusion was muddled even more given the fact that before the merger, Beachbody LLC’s business relied heavily on multi-level marketing.

Multi-level marketing (MLM) is a type business structure that relies on independent contractors to sell products and recruit more contractors to maximize sales volume.

Often, the general public confuses MLMs with pyramid schemes. This is unfortunate because pyramid schemes are illegal and there are no products sold in its structure. Pyramid schemes rely solely on recruitment fees to pay their members — a practice that is unstable; these schemes always collapse because they are a scam.

However, a true MLM is perfectly legal; they sell real products, and they are not a scam. Independent contractors are only compensated based on sales volume of actual products sold, they are not compensated by recruitment fees.

At a certain point though, it doesn’t matter what the truth is. A large portion of the general public had already made up their mind. They hear “Beachbody”, and they think “pyramid scheme”.

This was especially seen as true in the comments written by many retail investors (regular people) on apps such as Webull and Robinhood.

Shareholder Disappointment

What first appeared to be a success quickly turned into a major disappointment for The Beachbody Company’s intial investors.

In just a matter of weeks, the stock tanked and continued to do so.

Well over a year later, the stock price is sitting at $1.16 USD per share — down $12.89 from it’s high of $14.05 per share during the merger announcement on February 19th, 2021.

After losing an absurd amount of value, many retail investors are still holding onto these assets — just hoping that The Beachbody Company will turn a profit someday soon.

Until then, many are attempting to average down while waiting — some are choosing to take a loss altogether.

Damage Control

I imagine CEO and co-founder Carl Daikeler knows exactly the trouble that they are in right now.

When it became crystal clear that investors didn’t have the most faith in his company’s ability to get out of debt and turn a profit, he did what he does best: he pivoted.

Since the merger, Daikeler has attempted to introduce many new programs, features, and pricing tiers. Despite his efforts, those creative moves didn’t do so much to make the balance sheet look any nicer.

Simplification

In an attempt to make it easier to pay down the company’s debt and become more profitable, Daikeler began to simplify the company. While doing so, he simplified the structure of the business so that instead of having three separate divisions, they would be merged into one.

In mid 2022, it was announced that Openfit would be absorbed into the Beachbody platform. Later, it would be announced that the Myx bike would be renamed the BODi Bike.

Yet, even those moves didn’t seem to solve The Beachbody Company’s problems.

Major Rebrand

Just today, it was announced that Beachbody will be no more.

In the most heavy-handed attempt to appease shareholders, increase consumer trust in the company, and therefore increase revenue profits, Daikler announced that the Beachbody division will abandon it’s original name altogether.

Beachbody will now be known only as BODi.

BODi (short for Beachbody On-demand Interactive) was originally the name assigned to only a section of Beachbody On-demand. This section was created to compete with Peloton’s live spinning and fitness classes.

To the surprise of many retail investors, Daikeler made his announcement at a a quarterly company event held for their independent contractors (also known as “coaches”).

Playing down the fact that this rebrand may be driven by the company’s poor performance in the stock market, they’d tied the new name to a new focus on mental health.

Daikeler and his team feel that BODi will better resonate with a younger generation that weighs the importance of mental health and self esteem as greater over that of physical appearances alone.

The old name — they say — implies greater focus on physical appearance and nothing else.

The End of an Era

No matter the case, an extensive rebrand such as this is risky territory.

An established brand of nearly 25 years suddenly changing their name without warning to shareholders is also cause for alarm.

It signals that a company is desperate in their attempts to increase revenue and profits.

Often, a rebrand is just what a company needs. Though, sometimes they still fail.

Only time will tell if this move will actually reinvigorate The Beachbody Company’s main business. I don’t believe that BODi is going anywhere anytime soon, however there might be a bumpy road ahead.

One can only hope that in time, this move works.

Oh Hey, It’s Ray is a real estate investor, entrepreneur, and former real estate agent. She lives happily with her husband and two children in the Pacific Northwest. See more from Ray at her YouTube channel and on Ohheyitsray.com