Law firm Pomerantz reminds shareholders who suffered losses on their investment in Peloton Interactive, Inc. of class action and upcoming deadline – PTON

NEW YORK, December 07, 2021 (GLOBE NEWSWIRE) – Pomerantz LLP announces that a class action lawsuit has been filed against Peloton Interactive, Inc. (“Peloton” or the “Company”) (NASDAQ: PTON) and certain of its officers. The class action lawsuit, filed in the United States District Court for the Southern District of New York, and registered as 21-cv-10266, is in the name of a group consisting of all persons and entities other than the defendants who have purchased or otherwise acquired the common right of Peloton between December 9, 2020 and November 4, 2021 inclusive (the “Recourse Period”).

The claims raised herein are alleged against Peloton and certain of the senior officers of the Company (collectively, the “Defendants”), and arise from Sections 10 (b) and 20 (a) of the Securities Exchange Act of 1934 (the “ Exchange Act ”) and United States Securities and Exchange Commission (“ SEC ”) Rule 10b-5 promulgated thereunder.

If you are a shareholder who purchased Peloton common stock during the Class Period, you have until January 18, 2022 to ask the court to appoint you as the primary claimant. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those inquiring by e-mail are encouraged to provide their mailing address, telephone number and the number of shares purchased.

[Click here for information about joining the class action]

Based in New York City, Peloton is a fitness equipment and media company. During the Class Period, Peloton sold Internet-connected stationary bikes and treadmills that were designed and marketed for use in clients’ homes. Bikes and treadmills feature connected touchscreen devices that allow customers to access exercise classes and other content. To this end, in addition to exercise equipment, Peloton sells monthly subscription services that allow customers to access fitness classes using their Peloton equipment, or alternatively access classes and content. associated on their own devices, without using the Peloton equipment.

Throughout most of 2020 and 2021, as the COVID-19 pandemic and resulting stay-at-home orders and business closures largely kept individuals away from the gym, demand for options home exercise has increased dramatically. Against this background, in the months leading up to the Class Period, Peloton experienced unprecedented demand for its products and services. As the accused John Foley (“Foley”) confirmed in statements to investors on February 11, 2021, “there has been crazy demand for our products because the gyms have been closed or you didn’t want to go. at the gym because you might have COVID. So the demand has exploded[.]”

The complaint alleges that, throughout the litigation period, the defendants repeatedly and erroneously assured investors that Peloton’s recent success was not primarily due to increased demand related to COVID, but rather that the company’s growth and financial results were sustainable and would continue after COVID. For example, December 9, 2020, the first day of the Recourse Period, in response to an investor‘s question on “how a post-COVID world impacts [Peloton’s] seen [its] business opportunity, “the defendant Foley assured investors that Peloton’s results” ha[ve] nothing to do with COVID. It’s a human need to I want to get in shape, I want the fitness in my life in a consistent way; . . . I want it to be practical, I want it to be fun, I want it to be motivating and I want it to be great value. And all of these things are the basis of what Peloton offers, always delivered. We delivered it pre-COVID, during COVID, and we will deliver it post-COVID. “

The Defendants also told investors during the Class Period that investments in the Company’s supply chain, including increasing the number of bicycles and treadmills produced and reducing the average time required to deliver products to customers, were wise investments that would allow Peloton to align supply and demand for its products. For example, on February 4, 2021, in a letter to Peloton shareholders, the company stated that “our investments in the supply chain over the past few months are helping us to better match our supply and demand going forward. “. Accordingly, the Defendants stated that increasing inventory levels reported in the Company’s periodic financial reports filed with the SEC during the Class Period reflected pending demand, including orders that had not yet been fulfilled. , rather than an oversupply that exceeded declining demand.

The defendants’ statements during the appeal period that Peloton would continue to succeed and grow after COVID were false. In truth, Peloton’s financial results for the recourse period were primarily due to the increase in demand for home exercise options related to COVID. As gyms have reopened and other exercise options outside the home have become more available due to the spread of COVID vaccinations and the decrease in other COVID-related restrictions, the demand Peloton’s equipment and subscription services has declined significantly.

Additionally, rather than matching supply and demand, Peloton experienced massive inventory growth that far exceeded customer demand. In addition, the Company admitted that it suffered from a material weakness in its internal control over financial reporting during the Class Period, in particular with respect to inventory levels. In light of this significant weakness, the Company could not accurately report its inventory levels and had no solid basis to assure investors that supply and demand were aligned.

The truth began to emerge on August 26, 2021, after the market closed, when Peloton revealed, a day before the Company’s financial results were announced for its 2021 fiscal year, that “during our audit process of Fiscal year 2021, a material weakness has been identified in our internal controls over financial reporting with regard to the identification and valuation of inventories. In the company’s annual report for its 2021 fiscal year, filed with the SEC on Form 10-K on August 27, 2021, it further disclosed that “this material weakness arose because our controls were not effectively designed. , documented and maintained to verify that our physical inventory counts have been correctly counted and reported for reporting in our financial statements. “

As a result of these disclosures, Peloton’s common stock price declined $ 9.75 per share, or 8.5%, from a closing price of $ 114.09 per share on August 26, 2021 to a closing price of $ 104.34 per share on August 27, 2021.

At the same time, however, Peloton has made reassuring misrepresentation to investors, including releasing a forecast of $ 5.4 billion in total revenue for fiscal 2022 (as of September 1, 2021), a growth of 34% year over year. Discussing the forecast, defendant Jill Woodworth said “we are entering fiscal 2022 with a normalized backlog for our bicycle portfolio and the forecast reflects our expectation of continued strong demand.”

Then, on November 4, 2021, after the market closed, Peloton shocked investors by revealing that it had revised its revenue forecast for the full year to a range of $ 4.4 billion to $ 4.8 billion due to of the drop in demand, as its clients were increasingly free to exercise. outside the house. And when it comes to inventory, Peloton revealed that inventory totaled $ 1.27 billion, a 35% increase from the previous quarter, of which 91% was “finished goods” the company still held.

As a result of these disclosures, Peloton’s common stock price fell by $ 30.42 per share, or more than 35%, from a closing price of $ 86.06 per share on November 4, 2021 to 55 , $ 64 per share on November 5, 2021, wiping out $ 8.1 billion. in shareholder value.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris and Tel Aviv, is recognized as one of the leading firms in the areas of corporate, securities and antitrust litigation. Founded by the late Abraham L. Pomerantz, known as the Dean of the Class Actions Bar, Pomerantz was a pioneer in the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breach of fiduciary duty and professional misconduct. The firm has recovered numerous multi-million dollar damages on behalf of the members of the group. See www.pomlaw.com.

CONTACT:
Robert S. Willoughby
Pomerantz srl
[email protected]
888-476-6529 ext 7980


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