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large force Shares tumbled on Thursday after the U.S. Consumer Product Safety Commission said it would recall 2.2 million of the company’s bikes over injury and fall issues.
The stock fell nearly 9% on Thursday.
According to Peloton and the CPSC, the seatpost of the model PL01 bike can accidentally separate and snap off during use. Between January 2018 and this month, Peloton has received 35 reports of accidental seat breakage.Over 2 million bicycles sold in the U.S. during this period
According to an internal Peloton memo, there were 12 reports of injuries, including a broken wrist, related to defective parts.
The company added that the recall does not affect owners of the bikes in the UK, Germany or Australia.
“Our commitment to the safety of our members is unwavering,” Peloton said in a statement. “It is important for Peloton to proactively engage the CPSC in addressing this issue and to collaborate quickly to identify a remedy.”
The New York-based company will provide the updated seatpost free of charge to anyone using the recalled model. Peloton noted that while only 35 breakages were reported, all models of bikes in the U.S. could have problems.
The latest recall adds to a growing list of problems with Peloton’s hardware. In recent years, Peloton has disclosed several product recalls.
In 2021, the company discontinued sales of its Tread+ treadmill after a toddler died after being washed under it. The product is still not available, and the company continues to issue refunds.
In past recalls, Peloton has voiced disagreement with the administration when it identified potential flaws and has been slow to cooperate with officials. This time, the company signaled a change of tune by signaling its intention to proactively work with the CPSC.
In a memo sent to employees, Peloton said it took swift action on the relatively small number of affected bikes as part of its efforts to become a “members-first company.” Peloton added that it aims to work with regulators and follow their lead on safety.
The news comes a week after the company reported a wider-than-expected loss for its fiscal third quarter. Notably, Peloton also forecast its first drop in subscribers, citing an uncertain economic environment.
Some analysts said last week that the company had shown some signs of progress in its turnaround plan as it pushed forward with a new business plan.
