iRobot stock price collapses as Roomba maker files for Chapter 11 bankruptcy: Here's what happens next

Core Points - iRobot Corporation has filed for Chapter 11 bankruptcy protection, leading to a significant drop in its stock price, which is down over 78% [1][8] - The company has entered into a Restructuring Support Agreement with Picea Robotics, its primary manufacturer and largest debt holder [2][5] - iRobot plans to continue operations during the bankruptcy proceedings and will be owned by Picea Robotics once the process is complete [5][6] Company Background - Founded in 1990, iRobot was a pioneer in household robotics, with its Roomba vacuum cleaner gaining popularity since its launch in 2002 [2] - The company has faced increasing competition from cheaper and superior robotic vacuum products in recent years [3] - iRobot had a strong market presence in the U.S. and Japan, but its financial struggles intensified after an abandoned acquisition attempt by Amazon in 2022 [3][4] Financial Challenges - iRobot has been burdened by mounting debt, increased competition, higher operational costs, and the impact of tariffs [4] - The decision to file for bankruptcy was made as these financial pressures became unsustainable [4] Stock Impact - Following the bankruptcy announcement, iRobot's stock is expected to be delisted from Nasdaq, ceasing public trading [7] - Shareholders are warned that they may experience a total loss of their investment, with the stock price plummeting from a high of $137 in February 2021 to under $1 [9] Product Functionality - Concerns have arisen among Roomba owners regarding the functionality of their devices post-bankruptcy [10] - iRobot has assured customers that there will be no anticipated disruption to app functionality, customer programs, or product support during the bankruptcy process [11]