The Peloton Stock Danger ($PTON).

hey everyone kevin here i just want to

quickly talk about peloton and the

disaster going on

with the consumer product safety

commission

warning people who use the peloton tread

plus treadmill not

to use it especially around a children

or pets

this is obviously a little bit

problematic so i want to do a quick

look at uh what the peloton tread looks

like where the issue is

show you uh uh i don't know i'm still

debating if i want to show it to you

the video of a an uninjured

child uh getting uh kind of sucked into

the peloton threat so you can see where

the issue is uh and uh and then let's

talk some potential solutions so uh the

first thing when i heard this news

uh first thing i thought about was how

elevated

the the actual treadmill is

versus the floor so take a look at this

right here

oftentimes i've noticed uh treadmills

can be relatively

low to the ground and then you have a

belt that sort of runs on top of a

plastic frame

here you've really got this extension uh

this protrusion so to speak

of the actual belt uh exposed

so let's take a look at that versus some

regular treadmills here i'm just going

to hide myself for a second so the

pictures are nice and big since they're

over here

see you've got this plastic you know

frame over here

and then you've got a belt another

unique characteristic is

the peloton uses these slats that look a

lot more like this device here uses

these slats

which obviously things can get stuck in

those slats like fingers or

objects or whatever versus a a solid

belt but uh yeah i mean take a look at a

lot of these you don't have that

that same height protrusion off the back

the the back certainly not as large you

don't have the

rib treads uh yeah which you do have

with the peloton here's an example of

one that's a little higher off the

ground

but this one this is the bowflex but

it's also a solid belt

so maybe potentially less of an issue

here's maybe a more traditional

treadmill again

belt closer to the floor belts closer a

lot of these are the belt system

and they're much closer to the floor at

least that's what they look like

now if we go on over again to the

peloton

let's type that in one more time peloton

here again

just for comparison's sake we're going

to see how

large these these treads are here and

how high these are off the floor

relative to just a

belt notice too that the frame of the

product

is in line with the belt and the other

treadmills the frame of the product

protruded

out uh and above kind of almost acting

as a little bit of a shield

from this this tread here and they're

using belts

uh this is really just like a like a uh

the

the monster or the cookie monster coming

to just go

you know uh it's not good and uh

the recommendation or peloton's reaction

to this has been well i mean

keep children and pets away from a

treadmill it's a workout device right

uh peloton refutes consumer product

safety commission claims

uh cpsc publishes misleading inaccurate

bulletin on tread plus product safety

yada yada yada

there's no reason to stop using the

tread as long as you follow the safety

warnings

you know make sure you have the safety

plug in so you could take it

well it's got to be it but make sure

you're wearing it so you could take it

out quickly

if um if there's an emergency but what

happens in an event

where maybe uh maybe children turn the

machine on themselves

or which which of course there's the

argument that hey well you should be

paying attention to your children of

course i get that i got

look if anybody would turn a machine

like this on themselves

it'd probably be my kids i've got a

five-year-old

and three-year-old and these these kids

go everywhere

i think from a practical point of view

and then we'll talk about

you know kids just turning it on and

screwing around themselves from a

practical point of view

this is a little bit of an issue and we

you know i look at this and i ask would

i myself

as a reasonable adult here would i be

concerned about this

and in part i mean after hearing about

uh you know

death and marge from the peloton tread

personally

if i'm working out on the treadmill and

i'm on it and my kids are watching tv

behind me and then maybe they get around

and start

start playing around yeah i'd i'd

probably be a little bit more concerned

or certainly

i'd be more cognizant to maybe a block

off the back of the device

with some boxes or some pillows or or

whatever

just just to block off that back area of

the treadmill that would be very

important to me

uh and and i would do that as a

precaution

so where do we go from here peloton's

saying hey you know this information

is bs uh the product commission is

saying hey this is dangerous

and uh we even have a video here which

uh this is graphic

so i'm gonna do a graphic warning here

graphic cording

uh this child does not get hurt okay i

want to make that very clear

no child was injured in this at least

that's what the uh

you know uh display here from cnn says

credit to cnn for this video i know uh

probably half of you watching this do

not like cnn but they are the ones

sharing this video

so let's go ahead and give this uh give

this a play here uh i'm go

there's no audio so don't expect there

to be any audio

all right so uh actually i'm kind of

covering this corner up over here so

you've got uh what appears to be maybe

like a

five-year-old girl-ish on the actual

treadmill

and a younger child probably what i

think they actually say a two-year-old

child is playing with a ball near the

girl

so the girl has managed to turn this

treadmill on herself

it appears to be a play room given the

uh you know

the objects around here you've got a mat

and toys and things like that

okay all right so let's go ahead and

just play it

and obviously we don't see a parent in

the shot although this does seem to be a

pretty narrow shot here

but anyway let's uh focus

all right so here you can see the boy

putting a ball on the treadmill

boom stuck under the treadmill treadmill

lifts up

the treadmill's still on right now those

treads are

still moving albeit at a very very slow

pace

boy was not injured okay very important

because this is this is

graphic right uh so anyway

it's it's things like this that that are

leading people to be a little concerned

that

okay that's not so good i don't want

people to get

trapped under because the cookie monster

is coming to grab their children and

their pets

so that's a problem now what does this

mean

for peloton long run well peloton has

obviously

dropped about nine to ten percent today

stock wise

which is a pretty substantial reaction

uh right now and that's

that was at about its lows right now

it's down about 7.3 percent

what's my take on this my take is

worst case scenario what uh what what

peloton needs to do

is not any kind of recall of all these

heavy devices that would be a disaster

you imagine recalling all these devices

they got enough back orders on this to

where i'm not expecting this to affect

order flow could this affect future

orders

possibly maybe maybe other companies

start branding as

oh get this child safe treadmill or

whatever who knows could end up being a

pr stunt for for other companies as well

but personally what i believe that

peloton

would probably benefit from doing if

they

needed to do anything like if it came

out and and

it was concluded you know what you have

to do something

to solve this issue just the advisory to

watch your kids and pets around the

device isn't going to work

if that's the case then what i would

imagine peloton potentially doing

is either for free you know give for

free or

sell as an attachment for new users that

will probably just include it honestly

would be better

the optics of selling a safety feature

separately is generally not very good

uh selling an attachment that can be

installed or sort of bolted onto this

this back section here and here so some

sort of bolt that maybe goes here and on

the other side

and it's some kind of maybe a plastic

shield or i'm kind of picturing like a

black

box almost like uh you know a metal kind

of shield or something that covers just

the back

rollers completely almost maybe it even

kind of floats above the rollers a

little bit

uh and so that way it's it's harder for

something to even get kind of

caught into that that metal box

some some i'm sure this could be

designed much more

well than what i'm describing here but i

imagine some sort of retrofit attachment

to the back of this device

could be a child or pet safety device

that could be added to this

and it would solve the problem

relatively inexpensively

i would expect it would probably cost

peloton somewhere around

you know if people wanted if it was

something that they could self-install i

don't know if it could be self-installed

that would be the most convenient if

this could self-install maybe

attach to the legs down here and uh

loop around maybe something it has to be

relatively stupid proof

but i would imagine the cost would

probably run peloton somewhere around 50

bucks

per tread owner

sure it's an expense but this is nowhere

near brand

killing this if anything this is just

bringing more i mean remember the rule

no press is bad press

ironically if anything this is just

bringing more attention to the peloton

brand again

i think some people are going to look at

these videos and hear these reports and

go come on parents like pay attention

and then this look this can go both ways

because

you know like every parent at some point

is like oh my kids are fine

they're just in the front room playing

and then you're cooking some food for

them because kids are exhausting and

then

before you know it they're getting

sucked under a treadmill

it's tough kids are tough but anyway i'm

not trying to make excuses for kids

mostly i'm looking for parents

mostly looking at this from a company

perspective uh this is obviously bad

press

uh maybe not necessarily horrible for

future sales i don't expect there to be

a ton of cancellations i don't know

and i don't really expect there to be

that many people who don't buy this

because of

a child getting injured obviously my

heart goes out for

not only well just child but the family

uh of of the child

that uh that did pass away in march uh

and it's a concern

and a peloton might have to include some

kind of retrofit upgrade

but i expect that to be maybe worth a

dollar

of of stock value not the

10 or 11 point sell-off that we've seen

today that's my expectation so my

thoughts on peloton

still very bullish on the company we're

still seeing by the way it's worth doing

a little website uh analytics uh update

as well

we're still seeing growth which is

really incredible because i was

expecting after the january 1st

you know hey come back and work out a

lot movement and then and then people

get exhausted and then they don't want

to work out anymore you know the whole

new year's resolution thing

is really expecting after the new year's

resolutions peloton website activity to

plummet

uh and certainly during the reopening

i've been expecting the peloton

website activity deployment it just

hasn't been the case

look at the alexa search rankings or

traffic rankings rather

traffic rankings are phenomenal not only

are they up through

march but they've been stable since

march we do have a little bit of a of a

shelf here a little bit of growth here

but still this is this is phenomenal for

for uh you know a fitness company

into march i'm sorry into april now of

the new year and into reopening this is

still phenomenal website traffic

still seeing excellent website data

we are global page views are up 31

percent over the previous

three months that global reach up 46

over the last three months we have

bounce rate

that is down one percent over the last

uh three

months we do have page views down

slightly

we're down 10 on page views over the

last three months

and that might be because they may have

consolidated how many pages they have

uh time on website is down about three

percent

over the last three months though so uh

anywho

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