Peloton’s 5th Recall Sends Riders Flying (Literally)... RIP to the Holiday Hype Cycle

Well, Peloton has an earnings call after the market closes today, so you know what that means… time to issue another recall. (Is it just me or is the only thing getting a workout these days their legal department?)

This morning, the company announced it’s recalling every single one of its original Bike+ models (all 833,000 of them) because the seat post might decide to quit mid-ride and send you flying like you just hit a banana peel in Mario Kart.

The Consumer Product Safety Commission (aka the people who exist solely to tell you that your $3,000 luxury spin bike might kill you) says there’ve been three reports of the seat post breaking, with two riders injured. Peloton’s offering a free replacement seat post you can install at home… perfect for all those who love working on their $5,000 workout equipment (and emergency room visits).

(Source: The Verge)

The company, doing its best “we care deeply” impression, said: “The integrity of our products and our Members’ well-being are our top priorities.” Translation: “Please don’t cancel your $44.99 monthly subscription before Christmas.”

If this all sounds familiar, that’s because it is. Last year, Peloton recalled 2.2 million of its base bikes for (you guessed it) the exact same seat post issue. That little mishap cost them $40 million and 15,000 paused subscriptions as the company was just starting to get back it’s legs… gave the shorts even more firepower.

And just to jog your memory (pun intended): this is Peloton’s fifth recall since launching. So if you’re in the market for a new Peloton you can rest assured not only are they crazy expensive but they also have the design and structural integrity of something off Temu.

This latest one couldn’t have come at a worse time either. Just a month ago, new CEO Peter Stern (formerly of Apple, where things rarely explode) was busy raising prices and hyping Peloton’s new “AI-powered” workout features. Now, instead of bragging about artificial intelligence, he’s probably fielding calls about artificial hips.

(Source: Axios)

Peloton stock slipped less than 1% after the recall, which pretty much says it all (the market’s too numb to care anymore. It’s like that one family member at Thanksgiving who has a meltdown halfway through dinner) the first time, everyone’s concerned. By year five, you just pass the rolls and let it play out.

Timing-wise, it couldn’t be worse. The holidays are when Peloton’s supposed to shine… not go viral for catapulting riders across living rooms. Even if the financial hit’s small on paper now, Christmas sales are gonna go down BIGLY.  If you’re looking for a silver lining here, at least Peter has a chance to try to spin this and dampen the blow on the earnings call this evening (which better be a beat or the shorts are gonna feast).

At the time of publishing this article, Stocks.News holds positions in Apple as mentioned in the article.