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The
U.S. Department of Justice and the Department of Homeland
Security subpoenaed the company for documents and information
over injuries from its exercise machines, the company said in a
filing with the U.S. securities regulator https://bit.ly/38kFsf8.
The disclosure is the latest setback for Peloton over its
treadmills, which were recalled in May.
The company initially said in April there was no reason to stop
using the Tread+ machines, and its Chief Executive Officer John
Foley publicly apologized for its early response to the reports.
Peloton disclosed on Friday the U.S. Securities and Exchange
Commission was also investigating the company's public
disclosures related to the injuries, and that it had been named
in several lawsuits associated with the recalls.
"We intend to cooperate fully with each of these investigations,
and at this time, we are unable to predict the eventual scope,
duration or outcome of the investigations," the company said.
The fitness equipment maker benefited last year from a home
fitness boom as the pandemic forced gyms to stay shut.
Peloton said late on Thursday its near-term profitability would
be affected due to a decision to slash the price of its exercise
bike and higher commodity and marketing costs.
The company also introduced monthly financing options for some
of its products across all regions, as it looks to prevent a
slowdown in its business.
Peloton's shares were down nearly 8% at $105.20 in premarket
trading on Friday.
(Reporting by Manas Mishra in Bengaluru; Editing by Shounak
Dasgupta)
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