Peloton Interactive, Inc. Class Action Lawsuit - PTON

Company Name
Peloton Interactive, Inc.
Stock Symbol
Class Period
December 9, 2020 to November 4, 2021
Motion Deadline
January 17, 2022
Southern District of New York
49 days left to seek lead plaintiff status

Case Summary

The Peloton securities class action lawsuit seeks to represent purchasers of Peloton Interactive, Inc. (NASDAQ: PTON) common stock between December 9, 2020 and November 4, 2021, inclusive (the “Class Period”) and charges Peloton along with certain of its top executives with violations of the Securities Exchange Act of 1934.  The Peloton class action lawsuit was commenced on November 18, 2021 in the Southern District of New York and is captioned City of Hialeah Employees’ Retirement System v. Peloton Interactive, Inc., No. 21-cv-09582.

If you wish to serve as lead plaintiff of the Peloton securities class action lawsuit, please provide your information by clicking here.  You can also contact attorney Jennifer N. Caringal of Robbins Geller by calling 800/449-4900 or via e-mail at jcaringal@rgrdlaw.com.  Lead plaintiff motions for the Peloton securities class action lawsuit must be filed with the court no later than January 18, 2022.

CASE ALLEGATIONS: In the months leading up to the Class Period, Peloton experienced unprecedented demand for its products and services.  But as alleged in the Peloton securities class action lawsuit, defendants repeatedly falsely assured investors that Peloton’s recent success was not primarily due to COVID-related increased demand, but rather that Peloton’s growth and financial results were sustainable and would continue post-COVID.  The Peloton securities class action lawsuit also alleges that defendants misrepresented that investments in Peloton’s supply chain were sound investments that would enable Peloton to align supply and demand for its products. 

In truth, Peloton’s Class Period financial results were primarily driven by COVID-related increases in demand for at-home exercise options and rather than matching supply and demand, Peloton had a massive growth in inventory that far exceeded customer demand.  Further, Peloton has admitted that it suffered from a material weakness in its internal control over financial reporting during the Class Period, specifically concerning inventory levels.  In light of that material weakness, Peloton could not accurately report its inventory levels, and had no sound basis to represent to investors that supply and demand were aligned.

On August 26, 2021, Peloton revealed that “in the course of our fiscal 2021 audit process, a material weakness was identified in our internal controls over financial reporting with respect to identification and valuation of inventory.”  In Peloton’s Annual Report for its fiscal year 2021, Peloton further disclosed that “this material weakness arose because our controls were not effectively designed, documented and maintained to verify that our physical inventory counts were correctly counted and communicated for reporting in our financial statements.”  On this news, the price of Peloton common stock declined by more than 8%.

Then, on November 4, 2021, Peloton disclosed that it had revised its full year revenue guidance down to a range of $4.4 to $4.8 billion due to declining demand as its customers were increasingly free to exercise outside the home.  And regarding inventory, Peloton disclosed that inventory totaled $1.27 billion, a 35% increase over the prior quarter, 91% of which were “finished products” that Peloton still held.  As a result of these disclosures, the price of Peloton common stock declined by an additional 35%, damaging investors.

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Peloton common stock during the Class Period to seek appointment as lead plaintiff in the Peloton securities class action lawsuit.  A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.  A lead plaintiff acts on behalf of all other class members in directing the Peloton securities class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Peloton securities class action lawsuit.  An investor’s ability to share in any potential future recovery of the Peloton securities class action lawsuit is not dependent upon serving as lead plaintiff. 

ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions.  Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig.  The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm.

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