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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Peloton Interactive, Inc.    PTON

PELOTON INTERACTIVE, INC.

(PTON)
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Peloton Interactive : Faces Uphill Ride On "Ever-Growing" Claims

11/23/2020 | 05:10am EST

Peloton Interactive sells exercise bikes and treadmills that can stream live and on-demand fitness classes. For a while, the company advertised that its library of classes was "ever-growing." Although that may have been true when the company first made the claim, things changed. In response to a lawsuit related to the music used in some classes, Peloton cut more than half of its content in 2019. Soon after, plaintiffs filed a class action lawsuit against the company, arguing that the "ever-growing" claim was false.

The case is on-going, but the New York court's recent ruling on Peloton's motion to dismiss touches on at least two issues that frequently come up when we talk to clients.

Peloton argued that although it advertised that its library was "ever-growing," the Terms of Service to which the plaintiffs agreed clearly explained that the company reserved the right to remove content from its library at any time. The court wasn't sympathetic and relied on a principle that we've blogged about before. A consumer who sees an ad shouldn't be expected to search in other places to learn about important limitations. (Click here for a different example.)

After dismissing Peloton's argument that the "ever-growing" claim was puffery, the court considered Peloton's argument that the claim is true because the company consistently adds new content to its library. In other words, "ever-growing" was a representation about updates, not a representation about the aggregate size of the library. The court didn't buy it. Looking at the plain meaning of the words, the court determined Peloton arguably communicated a claim about the total size of the library.

We'll continue to watch this case as it develops but will leave you with two key points for now. First, although language in Terms of Service may protect a company against a breach of contract claim, it's less likely to offer protection against a false advertising claim. Second, be careful about claims that suggest promises about the future. Those claims could come back to haunt you if things later change.

Originally Published by Kelley Drye, November 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Gonzalo E. Mon
Kelley Drye & Warren LLP
Washington Harbour, Suite 400
3050 K Street, NW
Washington
DC 20007
UNITED STATES

© Mondaq Ltd, 2020 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source Business Briefing

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Financials (USD)
Sales 2021 3 926 M - -
Net income 2021 110 M - -
Net cash 2021 1 617 M - -
P/E ratio 2021 507x
Yield 2021 -
Capitalization 46 165 M 46 165 M -
EV / Sales 2021 11,3x
EV / Sales 2022 8,23x
Nbr of Employees 4 404
Free-Float 86,5%
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Peloton Interactive, Inc. Technical Analysis Chart | PTON | US70614W1009 | MarketScreener
Technical analysis trends PELOTON INTERACTIVE, INC.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 28
Average target price 146,85 $
Last Close Price 157,81 $
Spread / Highest target 20,4%
Spread / Average Target -6,94%
Spread / Lowest Target -79,1%
EPS Revisions
Managers and Directors
NameTitle
John Foley Chairman & Chief Executive Officer
William J. Lynch President & Director
Thomas Cortese Chief Operating Officer & Head-Product Development
Jill Woodworth Chief Financial Officer
Yony Feng Chief Technology & Investment Officer
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