Peloton's market value evaporates by $4 billion due to child death caused by its product

Recently, the stock price of Peloton, an American fitness equipment manufacturer, fell by nearly 15% at the close of Wednesday, and its market value evaporated by US$4.1 billion. The main reason for the evaporation of market value was that its treadmill caused the death of a child and injured more than 70 people.

Peloton recalls more than 120,000 treadmills

Recently, Peloton said it was wrong to fight the Consumer Product Safety Commission's request and recalled 125,000 of its treadmills on Wednesday , including the $4,295 Tread + and Peloton's cheaper Tread, which sells for $2,495. It is reported that the treadmill has not yet been released in the United States.

Previously, the Consumer Product Safety Commission said the treadmills had caused the death of one child and more than 70 injuries. But when the federal safety agency issued a warning about the dangers last month, Peloton took the unusual step of refusing to recall them.

The reversal comes more than two weeks after the US agency issued an "urgent warning" to machine users , with Peloton initiating a recall . By then, the US Consumer Product Safety Commission ( CPSC) said there had been 39 incidents involving the treadmill, including "numerous reports of children being trapped, pinned, and pulled underneath the device."

The U.S. Consumer Product Safety Commission ( CPSC) released a video showing a child getting trapped underneath a motorized treadmill when it was lifted off the ground. The agency released details of other incidents, including a child being injured when an adult was using it, and "pets and objects" being sucked under the treadmill, warning that "injury to the user may occur if the user loses balance."

Peloton's stock price has risen 400% in 2020

Peloton has been a huge winner in 2020 as its stock price has risen more than 400% that year , driving its market value to a peak of $49 billion in mid-January. Its revenue has also surged to $1.8 billion from $915 million a year ago .

But the treadmill malfunction now appears to have sent Peloton's stock price to its lowest level since September, with the stock closing the day at $82.62. The company has since been in a back-and-forth with the U.S. Consumer Product Safety Commission over dozens of machine-related injuries.

Peloton said on Wednesday that it should have taken action to resolve the treadmill problem earlier. It is currently working hard to make repairs to give all consumers a perfect solution and apologize to all consumers.

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