PTON recalling 30k bikes

The following has not been posted yet to my knowledge:

https://www.forbes.com/sites/elanagross/2020/10/15/peloton-r…

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Argh sorry, the subject was supposed to read pedals to 30k bikes, unfortunate I can’t edit the post

These were on bikes sold 2013-16, out of warranty. Peloton recommends that pedals are changed annually. Nevertheless, they are gonna recall the 27k pedals. Perfect response.
The lawsuit filed by NordicTrack - taking pot shots at each other in Court seems to be a sideshow for these two companies.

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Yes, this recall was in the news today. It’s good to see that PTON is doing the right thing. Peloton’s popularity has only recently surged. 27,000 bikes sounds like a lot but it is a small fraction of the bikes that have been sold. As of the end of Q4 (6/30/2020), Peloton had 1,090,000 subscribers so they probably have more than a million customers with bikes. That means that 27k is less than 3% of the installed bikes. The stock is down 3.5% today, maybe due to the news of this recall. I don’t think it’s a big deal as a percentage of the size of their business.

Chris

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“Peloton had 1,090,000 subscribers so they probably have more than a million customers with bikes. That means that 27k is less than 3% of the installed bikes“

Subscribers doesn’t mean that all those people bought Peloton bikes. Many just use the app.

I don’t have a Peloton Bike but I ride with their app.

Anyone that rides regularly knows that pedals can break over time and need to be replaced.

Smart move on Peloton management to make this fix even though it seems these bikes are past warranty.
They must feel pretty good about their revenues and cash flow. :wink:

TMB

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Subscribers doesn’t mean that all those people bought Peloton bikes. Many just use the app.

I don’t have a Peloton Bike but I ride with their app.

In the past 8 quarters, PTON has booked $2.2B in fitness products. Most of that was bikes. There were sales prior to 8 quarters ago too. So let’s call it $2.195B. Divide that by $2200 per bike you get…

998,000 bikes.

Chris

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I thought of it as -
12k * $50/pedal pair = $1.3M, say $2M.
For a company with $3.5B rev this is not very significant.

On the upside, you have 27k customers with dated bikes, out of warranty. If you handle this recall seamlessly, you can possibly have a small % upgrade the bikes. Recall might pay for itself.
And you protect your base from going to competition.

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“Anyone that rides regularly knows that pedals can break over time and need to be replaced.”

I used to build bikes and race them. Good pedals shouldn’t break. They must be using junk components on their bikes.

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True.

The rumor I heard was the initial set of bikes that PTON released had the pedals installed wrong. They were known for breaking, but now that’s not the case.