Following the recall of more than 2 million bikes by the CPSC, Peloton stock fell
ESSENTIAL POINTS
- More than 2 million Peloton cycles are being recalled by the US Consumer Product Safety Commission due to concerns about injury and falls.
- The U.S. Consumer Product Safety Commission announced Thursday that 2.2 million of the company’s bikes are being recalled due to safety concerns around falls and injuries.
According to Peloton and the CPSC, the seat post on bikes with model number PL01 can unexpectedly detach and break while in use. Between January 2018 until this month, 35 reports of unforeseen seat damage were submitted to Peloton. Over 2 million of the bikes were sold in the U.S. within that time frame.
An internal Peloton note states that 12 injuries, including one wrist fracture, were associated with the part problem.
According to the firm, bike owners in Australia, Germany, or the United Kingdom are not affected by the recall.
“Our commitment to Member safety is unwavering,” Peloton stated in a statement. It was crucial for Peloton to proactively include the CPSC in order to address this problem and to quickly and jointly find a solution.
Anyone utilizing the recalled model will be given free upgraded seat posts by the New York-based business. Although just 35 breakdowns were recorded, Peloton cautioned that all bike models sold in the US may be affected.
The most recent recall is another in a long line of problems with Peloton’s hardware. In recent years, Peloton has made public a number of product recalls.
After a little child died after being swept beneath the treadmill in 2021, the business stopped selling its Tread+ treadmill. The corporation is still giving back money for that discontinued product.
When the government recognized potential issues in previous recalls, Peloton disagreed and took its time cooperating with authorities. This time, the company’s declared intention to actively work with the CPSC represents a shift in strategy.
In a memo to staff members, Peloton stated that in keeping with its mission to be a “Member-first company,” it moved quickly to address the relatively small number of damaged bikes. Peloton further stated that it aimed to cooperate with regulators and adhere to their guidance on safety issues.
The announcement comes a week after the business disclosed a larger-than-anticipated loss for the third quarter of its fiscal year. Interestingly, Peloton also foresaw their first-ever fall in subscribers, blaming the unstable financial situation.
Last week, some experts claimed that the company’s efforts to push new business initiatives had shown some signs of improvement in its turnaround plan.
On Thursday, Peloton stock fell.
The company’s declared intention to work with the CPSC represents a shift in direction for Peloton.
The announcement follows Peloton’s unimpressive earnings report.
