I don’t like to share failures, so I’m writing this reluctantly; however, I believe it might be of interest to Peloton owners.
I was enamoured with the company and its products: the bike is a smash; the top line numbers are amazing; the customers are raving, and the reviews are generally very favourable.
The Tread looks to be a hit as well, and I was excited about it; until accidents reports surfaced, involving children (and pets) with, tragically, a death. As if this wasn’t bad enough, a video of such an accident was published online, with a threat to force the company to stop selling or recall the Treads.
Now, I realised a few cracks in the Peloton’s story that made me bail out:
- with the multiplication of treads in homes, such accidents will only augment, not diminish
- the attitude of the CEO, claiming that no Treads would ever be recalled, is at best confrontational; when called out by lawmakers, a more suitable attitude would involve at least some humility (I would also not like FB-style plain stonewalling against Lawmakers)
- also the insistence on putting all safety responsibility on parents, when I believe that some basic safety measures should have been actively pursued (Why isn’t there some kind of barrier preventing being sucked under the machine? why are other treadmills not suffering from the same fatal flaws?)
- the bikes and the Treads are potentially recallable if a major flaw was to emerge, deepening costs.
This added to the fact that most bikes are built in Taiwan, an island whose probability of remaining independent is rapidly unraveling.
I therefore sold, at a loss (20%), and it was a big position (10%), so total portfolio loss was 2%. Not so dramatic, but again, I don’t like to share defeats.
I hope for the holders that the outlook will improve; I think the company will find a solution to these problems; it is just that, for me, it has become too much to bear.
Hope this helps other hesitating holders to make a decision.