RADNOR, Pa., June 2, 2021 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP reminds investors of Peloton Interactive, Inc. (NASDAQ: PTON) ("Peloton") that a securities fraud class action lawsuit has been filed on behalf of those who purchased or acquired Peloton securities between September 11, 2020 and May 5, 2021, inclusive (the "Class Period").
Peloton provides interactive fitness products such as the Peloton Bike and the Peloton Tread+ and Tread, which include touchscreens that stream live and on-demand classes. Peloton also provides connected fitness subscriptions and access to all live and on-demand classes. Peloton launched the Tread+ treadmill in 2018. At that time, it was called the "Tread." Peloton renamed its signature treadmill in September 2020 to "Tread +."
The Class Period commences on September 11, 2020, when Peloton filed its annual report on a Form 10-K for the year ended June 30, 2020. Throughout the Class Period, the defendants asserted that the safety and well-being of its customers was a priority.
However, the truth was revealed on April 17, 2021, a day the market was closed, when the U.S. Consumer Product Safety Commission ("CPSC") issued a press release entitled "CPSC Warns Consumers: Stop Using the Peloton Tread+" alerting the public to dangers, including death, associated with the Peloton Tread+. In the press release, the CPSC warned "consumers about the danger of popular Peloton Tread+ exercise machine after multiple incidents of small children and a pet being injured beneath the machines. The [CPSC] has found that the public health and safety requires this notice to warn the public quickly of the hazard." The CPSC further stated that it "is aware of 39 incidents including one death. CPSC staff believes the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death. 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 18, 2021, a day the market was closed, John Foley, Peloton's Chief Executive Officer, wrote a letter that was emailed to Tread+ owners and published on Peloton's website stating that Peloton had "no intention" to stop selling or to recall the Tread+. Following this news, Peloton's stock price fell $16.28 per share, or more than 14%, over the next three trading days to close at $99.93 per share on April 21, 2021.
Then, on Wednesday, May 5, 2021, Peloton announced voluntary recalls of both its Tread+ and Tread treadmill machines over safety concerns. Peloton also advised customers who have the products to immediately stop using them and contact Peloton for a full refund. Peloton's Chief Executive Officer, John Foley said in a statement, "I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission's request that we recall the Tread+."
On this news, Peloton's stock price fell $14.08 per share, or 14%, to close at $82.62 per share on May 5, 2021.
The complaint alleges that throughout the Class Period, the defendants 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 the 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 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 their balance; and (5) as a result of the foregoing, the defendants' statements about Peloton's business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
Pelotoninvestors may, no later than June 28, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP James Maro, Jr., Esq. Adrienne Bell, Esq. 280 King of Prussia Road Radnor, PA 19087 (844) 887-9500 (toll free) [email protected]