Peloton is bracing for financial pain as US government agencies circle, with numerous subpoenas and lawsuits now targeting the company over safety issues with its treadmills.
The US Department of Justice and Department of Homeland Security have both subpoenaed documents from the embattled fitness equipment manufacturer over at least 39 incidents of injury (above, image from US Consumer Product Safety Commission) – including the death of a child – from the company’s Tread and Tread+ treadmills, which were hit by a sweeping recall covering more than 126,000 units earlier this year.
Additionally, Peloton and its executives are the subjects of at least six lawsuits, and the Securities and Exchange Commission (SEC) is looking into public disclosures of the incidents. Peloton has said in a statement to the SEC that it is fully cooperating with investigations.
“Litigation, regulatory proceedings, such as the investigations described above, as well as related personal injury or class action claims and lawsuits, and securities and intellectual property infringement matters that we are currently facing or could face, can be protracted and expensive, and the results are difficult to predict.
“Even if these matters are resolved in our favour or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, financial condition, and operating results,” it said.
Peloton recently launched in Australia, though at this stage only its exercise bikes and app are available, along with accessories and apparel.
