Peloton’s stock tanks after US agency issues ‘urgent’ safety warning

 Peloton’s stock tanks after US agency issues ‘urgent’ safety warning

Shares of Peloton tumbled on Monday after the US government issued an “urgent warning” to owners of the company’s Tread+ treadmill that advised them to stop using the machine.

On Saturday, the US Consumer Product Safety Commission said it has learned of 39 accidents involving the $4,295 treadmill, including “multiple reports of children becoming entrapped, pinned, and pulled under” the machine.

The CPSC said it is urging customers with small children and pets to stop using the Tread+ immediately.

One child died in a March accident related to the Tread+, the company said last month, and on Saturday the CPSC released a video showing a toddler getting sucked under a Peloton Tread+ as he chases after a ball and told consumers to stop using high-end treadmill. The toddler in the video wasn’t injured.

“CPSC staff believes the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death,” the agency said.

Peloton shares were down 7.6 percent at $107.41 in early trading on Monday.

In a Sunday blog post to customers, Peloton Chief Executive John Foley said the company will not “stop selling or recall” the Tread+ as the CPSC had suggested, insisting they are safe if properly used.

“Tread+ is not for children under 16, and children, pets, and objects need to be kept away from the Tread+ at all times,” according to Foley.

The company is also working on a new “software-enabled, backup access code that will provide an additional layer of protection against unwanted use of the Tread+. We are working hard to roll this out soon,” Foley said.

Foley added that Peloton has responded to all of the regulatory agency’s requests, with one exception.

“We resisted their demands for personally identifiable information of certain Members because those members had specifically requested that we not provide that information to CPSC,” according to Foley.

“At no time was Peloton trying to impede CPSC’s investigation,” Foley added. “We were simply standing behind our members’ right to maintain their privacy, and we remain committed to providing this type of information only with a Member’s consent or pursuant to a subpoena,” Foley said. 

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