Shares of Peloton [NASDAQ: PTON] is Crashing Today. Here’s Why

Shares of Peloton Interactive, Inc. [NASDAQ: PTON] crashed 13.13% at the time of writing on Wednesday. The weak performance of the firm came after the CEO of PTON labeled its initial response to safety concerns a “mistake.” The firm has retreated today on its early response to the U.S. CPSC related to the safety fears with its treadmills.

Earlier, in March, PTON was warned that a child has passed away due to an accident with one of its treadmills. Earlier, CEO has sent the letter to the customers and remind him of safety instruction that comes along with treadmill. The warning “read keep children and pets away” from the equipment. Moreover, the instruction also warned the owners to remove the safety keys of the machines when they are not in use.

The CPSC disclosed that Peloton was reminding the $4,295 Tread+ and the $2,495 tread, pointing out that people who purchased either piece of equipment should discontinue using it instantly and contact the firm for a full refund. CPSC disclosed that the accident of the child is not the first one, there are 70 more incidents related to the treadmill.  PTON has called the press release of CPSC false. But on Wednesday, the CEO released a statement and said that the initial response of the firm is a mistake and apologized for the response.

Foley stated: “We should have involved more effectively with them from the beginning. For that, I am sorry. Today’s statement indicates our acknowledgment that, by working in close cooperation with the CPSC, we can enhance the safety perception for our Members.”