Roomba Maker iRobot Declares Bankrupty. Its Stock Is Plunging 70%

Core Insights - iRobot (IRBT) shares dropped over 70% following the announcement of a Chapter 11 bankruptcy filing, with plans for a Chinese robotics firm, Picea, to acquire 100% of its equity [1][5] - CEO Gary Cohen described the bankruptcy and acquisition as a crucial step for iRobot's long-term future, aiming to enhance financial stability and ensure continuity for stakeholders [2] - Current Roomba users will not experience disruptions, as iRobot assured that app functionality, customer programs, and product support will remain intact [3] Financial Context - The Chapter 11 filing allows iRobot to restructure its operations and negotiate with creditors, with Picea set to acquire the company [2] - Earlier in 2023, iRobot's shares fell 35% due to concerns over tariffs, macroeconomic conditions, and competition, leading to a strategic review of options [4] - iRobot shares have lost approximately 85% of their value in 2025, reflecting ongoing financial struggles [5] Historical Background - A previous acquisition deal with Amazon fell through due to regulatory scrutiny, leading to significant changes in iRobot's leadership and workforce reductions of about 30% [3] - The company has faced substantial challenges, including a decline in consumer demand and increased competition, contributing to its current financial situation [4]