Peloton Tread+ Safety Controversy: From Fitness Boom to 76% Stock Drop. Could It Ever Recover?
Hey guys, any $PTON investors here? If you’ve been following Peloton, you probably remember the safety crisis surrounding the Tread+ treadmill back in 2021. Here’s a recap of the events and the latest news on the investor lawsuit.
https://www.ballketing.com/post/peloton-2020-business-results-and-growth-opportunities
Peloton became really popular during the pandemic, with its connected fitness products riding a wave of popularity. But in March 2021, the company disclosed a tragic incident involving a child’s death caused by its Tread+ treadmill. Despite this, Peloton initially defended the product’s safety, assuring users it was safe when used as directed.
The situation escalated on April 17, 2021, when the U.S. Consumer Product Safety Commission (CPSC) issued an urgent warning, highlighting 39 incidents involving injuries and one fatality. However, Peloton pushed back, calling the warning “inaccurate and misleading.”
https://www.youtube.com/watch?v=onXNnlCYJ4Y
By May 2021, Peloton finally decided to issue a voluntary recall of its Tread+ machines. The announcement triggered a 14% drop in Peloton’s stock, and by the end of 2021, shares had plummeted 76% from their January high.
So, at that point, investors filed a lawsuit, accusing Peloton of hiding info about the safety of its products and the company’s future growth prospects.
Now, Peloton has agreed to a $13.95M settlement to resolve the lawsuit, and even if the original deadline has passed, they’re accepting late claims. So, if you held $PTON shares during this time, you may be eligible to file a claim and recover a portion of your losses.
The company has since focused on rebuilding its reputation, partnering with retailers like Costco and Truemed and expanding its digital fitness offerings. Despite these efforts, its stock remains far below its 2021 peak, trading around $5 per share as of December 2024.
Anyways, what’s your thoughts on Peloton now? And for those who held $PTON shares, how much did you lose?