Roomba Maker iRobot Declares Bankruptcy. Its Stock Is Plunging

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 filing and acquisition as a crucial step for iRobot's long-term future, aiming to enhance its financial position 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 - Chapter 11 bankruptcy allows companies to restructure operations and negotiate with creditors, which in this case involves iRobot being acquired by Picea [2] - Earlier in the year, iRobot's stock fell 35% due to concerns over tariffs, macroeconomic conditions, and competition, leading to substantial doubts about its viability [4] - Following the bankruptcy announcement, iRobot shares have lost approximately 85% of their value in 2025 [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] - iRobot's stock has remained largely below $5 since March, indicating ongoing financial struggles [4]