Shares of Peloton Interactive fell 14.6% Wednesday as the company issued a recall on over 125,000 of its treadmills. This action comes in the wake of an April 17 warning by the U.S. Product Safety Commission, which revealed that a child had died after being pulled under a treadmill. The safety commission strongly advised all children and pets to stop using the exercise machine.
In total, Peloton has received reports of 72 people, pets or items like exercise balls, being dragged under the back of the treadmill. Of that number, 29 were said to be children who suffered injuries, such as broken bones. One child, a six-year-old, died as a result.
The New York-based company initially dismissed the safety commission’s warning, calling it “inaccurate and misleading.” CEO John Foley also stated that he would not take the Tread+ treadmill off the market.
Peloton has since apologized and is now offering full refunds of their more than $4,200 treadmills. The company said that it “made a mistake” in its response.
Sen. Richard Blumenthal (D-Connecticut), the chair of the consumer safety commission, said, “Peloton unacceptably put consumers at risk.” The senator is looking to strengthen the commission as, under current laws, they have to negotiate with companies about releasing warnings that concern hazardous products. If Blumenthal achieves this goal, then, “companies like Peloton no longer get to call the shots on consumer safety,” he said.
Peloton Tread+ treadmills are still being tested by the consumer safety commission, but a spokesman said that the treadmill’s design, like its belt and height from the floor, might make it more likely to pull people and objects under the back.
Though Peloton sales soared during the pandemic, as gyms became unavailable, they’re now facing backlash. Wednesday was the second-worst single-day percentage decline since the company went public.
Still, owners of the Tread+ have until November 22, 2022, to receive a full refund. If they choose to keep their treadmills, Peloton is also offering to move it to a place where children and pets can’t access, free of charge.
