Peloton Interactive, Inc.
On April 17, 2021, the U.S. Consumer Product Safety Commission (“CPSC”) issued a press release entitled “CPSC Warns Consumers: Stop Using the Peloton Tread+”. The release stated that the “Urgent Warning Comes After Agency Finds One Death and Dozens of Incidents of Children Being Sucked Beneath the Tread+ (Formerly Known as the Tread)”. The release further stated that “[t]he urgent warning comes less than a month after Peloton itself released news of a child’s death by a Peloton Tread+ and CPSC’s announcement of an investigation into that incident[,]” and “[t]o date, CPSC is aware of 39 incidents including one death.”
On this news, Peloton’s share price fell sharply during intraday trading on April 19, 2021, the next trading day, damaging investors.
The complaint alleges that defendants, throughout the Class Period, made false and/or misleading statements and/or failed to disclose that: (1) in addition to the tragic death of a child, Peloton’s Tread+ had caused a serious safety threat to children and pets as there were multiple incidents of injury to both; (2) safety was not a priority to Peloton as Defendants were aware of serious injuries and death resulting from the Tread+ yet did not recall or suggest a halt of the use of the Tread+; (3) as a result of the safety concerns, the U.S. Consumer Product Safety Commission (“CPSC”) declared the Tread+ posed a serious risk to public health and safety resulting in its urgent recommendation for consumers with small children to cease using the Tread+; (4) the CPSC also found a safety threat to Tread+ users if they lost balance; and (5) defendants’ statements about Peloton’s business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
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