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Peloton Interactive, Inc. Class Action Lawsuit

Company Name
Peloton Interactive, Inc.
Stock Symbol
PTON
Relevant Period
September 11, 2020 to May 5, 2021
Motion Deadline
June 28, 2021
Court
Eastern District of New York
41 days left to seek lead plaintiff status

Case Summary

The Peloton Interactive, Inc. class action lawsuit charges Peloton and certain of its executives with violations of the Securisties Exchange Act of 1934 and seeks to represent all persons and entities who purchased or otherwise acquired the publicly traded securities of Peloton between September 11, 2020 and May 5, 2021, inclusive (the “Class Period”).  The Peloton class action lawsuit was commenced on April 29, 2021 in the Eastern District of New York and is captioned Wilson v. Peloton Interactive, Inc., No. 21-cv-02369.

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.

The Peloton class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) 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; (ii) safety was not a priority to Peloton as 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+; (iii) as a result of the safety concerns, the U.S. Consumer Product Safety Commission (“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+; (iv) the CPSC also found a safety threat to Tread+ users if they lost their balance; (v) Tread featured similar safety concerns; (vi) merely reinforcing safety warnings would be insufficient; (vii) the CPSC and Peloton would issue a recall of the Tread+ and Tread; and (viii) as a result of the foregoing, defendants’ statements about Peloton’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.

On April 17, 2021, the 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+.  The press release stated that “[t]o date, CPSC is aware of 39 incidents including one death” and that “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 this news, Peloton’s stock price fell more than 14% over the next three trading days.

Then, on May 5, 2021, the CPSC issued a statement entitled “Statement of Acting Chairman Robert Adler on the Recall of the Peloton Tread + and Tread” which announced that Peloton would “immediately stop selling and distributing both the Tread+ and Tread products in the United States and refund the full purchase price to consumers who wish to return their treadmills.”  That same day, Peloton posted an article to its website entitled “CPSC and Peloton Announce: Recall of Tread+ Treadmills After One Child Death and 70 Incidents; Recall of Tread Treadmills Due to Risk of Injury,” stating, in part, that “[c]onsumers who have purchased either treadmill should immediately stop using it and contact Peloton for a full refund or other qualified remedy.” On this news, Peloton’s stock price fell an additional 14%, further damaging investors.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Peloton securities during the Class Period to seek appointment as lead plaintiff in the Peloton 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 class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Peloton class action lawsuit.  An investor’s ability to share in any potential future recovery of the Peloton action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the Peloton class action lawsuit or have questions concerning your rights regarding the Peloton class action lawsuit, please provide your information here or contact counsel, Michael Albert of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at malbert@rgrdlaw.com.  Lead plaintiff motions for the Peloton class action lawsuit must be filed with the court no later than June 28, 2021.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For eight consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

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