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Peloton faces an import ban on fitness equipment tied to potential patent infringements

White House officials are set to review a potential import ban levied against fitness equipment brand Peloton in relation to supposed patent infringements on devices from companies like Dish Network.

Video transcript

DAVE BRIGGS: My play is Peloton. Shares on a downhill ride again today after the US International Trade Commission issued a ban on the imports of the company's video streaming fitness devices. A judge found the devices infringed on Dish Network patents related to Hopper set-top boxes. Dish and Sling TV filed a complaint back in '21. Both Peloton bikes and treadmills were included in this action. Now, the Biden administration, though, has 60 days to review the ban before it actually takes effect.

A Peloton spokesperson said the ruling will, in no way, disrupt service for its users. I checked a number of tech blogs who actually agreed with Peloton on this. They said you should not notice any impact whatsoever if you are a current user, which Seana and I frequently remind you we are.

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You can see the stock, though, they believe it will have some impact. Investors clearly do. 8% it fell today, up, though, more than 50% this year after a very rough ride last year. Look, it's just another setback for Barry McCarthy, who's done just about everything to evolve this company out of the pandemic low and try to battle through it. It's just a long uphill ride, man.

SEANA SMITH: It certainly is, a long uphill ride and a steep one at that because it certainly seems like day after day, the headlines become a little bit more negative or just that trend continues here for Peloton. It's really hard for them to gain a sustainable momentum. But I'm a little bit surprised about the drop that we are seeing today. And I'll tell you why. Bernstein was out talking about this, saying that the 60-day review process is an opportunity to appeal.

And they're saying they're pretty confident that Peloton will actually be able to fight them or at least reach an agreement with Dish because Lululemon had a similar suit from Dish against them, and they were able to reach an agreement. Also Bernstein pointing out that a substantial chunk of its inventory is already in the US. So at least for now, maybe that gives them a cushion of several months, maybe up to a year, depending on those inventory levels. But could be a problem for them going forward.

JOSH SCHAFER: Yeah, it seems like part of the story here to make clear, right, is that this is for bikes that would be incoming into the US. So it doesn't impact bikes that are already here. And as you pointed out, if they have enough inventory already, which it seems like they do, then it's not necessarily an immediate problem. We're talking about a problem that comes well down the line.

DAVE BRIGGS: Of the many challenges they face, more of a speed bump than anything for Peloton.

SEANA SMITH: All right, but Peloton shares off 8% today.