NEW YORK CITY – Peloton (PTON), the exercise equipment company, is “taking a step back to reassess” after their luxury bicycle failed multiple road tests earlier this week. The setback surprised not only customers eager to hit the open road with their new holiday gifts, but also to investors, who have plunged the firm’s share price nearly 10%.
“Top product engineers are working around the clock to identify and drive solutions” in order to pass regulatory evaluations for road vehicles, assured Gregory Papp-Fields, the chief of product at Peloton. “We believe that we’ve localized the problem to the rear half of the frame,” Mr. Papp-Fields continued, “where the standing frame, in stead of the traditional second wheel on most bikes, is causing unnecessary friction with the road.” Estimates to remedy the situation range from a few weeks to potentially late 2021, should Peloton decide to incorporate as many as three additional wheels for redundancy and safety.
Despite initial reactions to the report, many institutional investors see the setback as only a temporary speedbump to success. George Fox, managing director at Pendle Hill Capital and early financial backer of Peloton, believes “the foundational subscription pricing model is perfect, but road-testing the bikes is crucial,” to draw new users into the proprietary streaming/coaching service.
“I mean, who the fuck’s gonna pay $2,000 for a bike that doesn’t even move?”