Peloton's stock was under pressure following the U.S. Consumer Product Safety Commission (CPSC) said that "multiple incidents of small children and a pet being injured beneath Peloton's Tread+ machines" preceded its formal warning, adding that its "continuing to investigate all known incidents of injury or death related to the Peloton Tread+."
"To date, CPSC is aware of 39 incidents including one death. CPSC staff believes the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death," the agency said. "In light of multiple reports of children becoming entrapped, pinned, and pulled under the rear roller of the product, CPSC urges consumers with children at home to stop using the product immediately."
"On April 17, Peloton issued a press release contesting statements made by...CPSC regarding risks associated with the Tread+. Peloton's press release was issued in reaction to the CPSC's April 17 release, "CPSC Warns Consumers: Stop Using the Peloton Tread+." The CPSC warning comes after learning of incidents involving small children and a pet being injured beneath Tread+ machines, in addition to an accidental child death previously reported. We expect the issue regarding the Tread+ could end with a protective guard added to the end of the treadmill or a similar remedy. While we don’t believe the event will have lasting consequences for the company, the timing of it isn’t great given the short-term vulnerability the stock has to increased human mobility. During this period of post-COVID uncertainty, we would be patient buyers of PTON shares on price pullbacks like has been presented today," Stifel wrote in a note about Peloton.
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