Peloton Interactive (NASDAQ: PTON) plummeted over 15% on Wednesday following news about recalling two versions of its treadmills. The company voluntarily decided to recall the newly released treadmills version after reporting several injuries and one death, according to U.S. Consumer Product Safety Commission.
Peloton urged Customers who purchased Peloton’s Tread+ or the Tread treadmill to stop using them and contact the company for a full refund, according to a joint statement that the company and the CPSC issued. The Tread+ costs $4,295 while it’s $2,495 for the Tread.
Additionally, the consumer safety regulators warned consumers on April 17 about the Tread+. At that moment, the agency received news about 39 treadmill-related injuries including one death. Meanwhile, On the same day, the agency released a video of a child who got sucked under the sports machine. As of this writing, there are 70 reported accidents.
John Foley, Peloton’s co-founder and chief executive, emailed owners of the Tread+ on Thursday to inform them of the incident.
“I’m reaching out to you today because I recently learned about a tragic accident involving a child and the Tread+. Resulting in, unthinkably, a death,” he wrote. “While we are aware of only a small handful of incidents involving the Tread+. Where children have been hurt, each one is devastating to all of us at Peloton. And our hearts go out to the families involved.”
Peloton reaches agreement with CPSC
Peloton on Saturday refuted the CPSC claims in a statement. It said: “The company is troubled by the Consumer Product Safety Commission’s unilateral press release. The ones where it mentionned the Peloton Tread+ because it is inaccurate and misleading.”
It added: “There is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed. Children under 16 should never use the Tread+, and Members should keep children, pets, and objects away from the Tread+ at all times.”
However, Peloton admitted to their mistake. The consumers’ safety regulators and Peloton reached an agreement following weeks of “intense” negotiation, said Robert Adler, acting chairman of the CPSC.
“Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+,” Peloton CEO John Foley said In a statement. “We should have engaged more productively with them from the outset. For that, I apologize.”