U.S. fitness equipment startup Peloton (PTON-US) plunged 14.56% to $82.62 per share on Wednesday, evaporating about $4.1 billion in market value, mainly due to safety concerns over its treadmill products that have caused one death and dozens of injuries.
After reports of children and pets getting caught in the rear wheels of the Tread+ treadmill, the U.S. Consumer Product Safety Commission (CPSC) called on consumers with children and pets to stop using Peloton Tread+ treadmills immediately in the middle of last month.
Peloton responded at the time that the CPSC’s statement was incorrect and misleading, but on Wednesday Peloton’s attitude took a 180-degree turn.
Peloton voluntarily recalled the Tread+ and all Tread treadmills Wednesday after the product has killed one child and injured more than 70 others to date.
Peloton is advising customers of the product to stop using it immediately and to get a full refund. The recall affects approximately 125,000 Tread+ and approximately 1,050 Tread treadmills in the United States.
Peloton CEO John Foley issued a statement apologizing: “Our early response to the CPSC’s request for a recall of Tread+ was inappropriate and Peloton should have engaged more productively with the CPSC from the beginning. I apologize for this.”
Peloton claims to be the “Netflix of fitness”
Peloton, the “Netflix of fitness,” has benefited from the global wave of at-home fitness driven by the new crown epidemic, with $1.8 billion in revenue in 2020, well above the previous year’s revenue ($915 million), and Peloton will report its latest earnings on Thursday.
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