PELOTON ALERT: Bragar Eagel & Squire, P.C. Announces that a Class Action Lawsuit Has Been Filed Against Peloton Interactive, Inc. and Encourages Investors to Contact the Firm
Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Peloton Interactive, Inc. ("Peloton" or the "Company") (NASDAQ: PTON) in the United States District Court for the Southern District of New York on behalf of all persons and entities who purchased or otherwise acquired Peloton securities between December 9, 2020 and November 4, 2021, both dates inclusive (the "Class Period"). Investors have until January 18, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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Peloton is a fitness-equipment and media company, whose main products are internet-connected stationary bicycles and treadmills that enable monthly subscribers to remotely participate in classes via streaming media.
For most of 2020 and 2021, the COVID-19 pandemic was a boon for Peloton. Because stay-at-home orders and business closures kept many people out of the gym, the demand for in-home exercise options increased dramatically. Throughout the pandemic, including in the months leading up to the Class Period, Peloton experienced unprecedented demand for its products and services.
According to the complaint, Defendants repeatedly represented that the Company's positive results and growth would continue after the pandemic. Defendants also allegedly made false and misleading statements about the amount of inventory that Peloton held, and touted the Company's ability to keep its inventoy levels in line with sustained demand.
On August 26, 2021, the Company disclosed that it had identified a material weakness in its internal controls over financial reporting "with respect to identification and valuation of inventory." However, at the same time that Peloton disclosed the weakness in its internal controls, Defendants continued to misrepresent and conceal the unsustainable nature of Peloton's financial results and growth post-COVID, issuing guidance of $5.4 billion of total revenue for fiscal year 2022, representing 34% year-over-year growth.
As a result of these disclosures, the price of Peloton common stock declined by $9.75, 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.
Then, on November 4, 2021, the Company announced second quarter financial results that fell far short of expectations and reduced its total revenue guidance for fiscal 2022 by a staggering $1 billion. Peloton further disclosed that inventory had skyrocketed to $1.27 billion, 91% of which comprised "finished products" that the Company still held. On Peloton's November 4 earnings conference call with investors, Defendants admitted that Peloton overestimated demand and underestimated the impact of gyms reopening as the pandemic subsides. As a result of these disclosures, Peloton's stock price declined by $30.42 per share, or over 35%, from a closing price of $86.06 per share on November 4, 2021, to a closing price of $43.68 per share on November 5, 2021.
If you purchased or otherwise acquired Peloton shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Alexandra Raymond by email at [email protected], telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
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