iRobot, the company renowned for its Roomba robot vacuums, has recently initiated Chapter 11 bankruptcy proceedings, a decision that led to a dramatic decline in its stock value. This strategic maneuver was announced on Sunday, causing shares to plummet by over 70% by Monday morning. The company revealed that a Chinese robotics manufacturer, Picea, which is also one of its primary contract manufacturers, along with one of its lenders, will acquire full equity, allowing iRobot to continue as a privately held entity.
According to CEO Gary Cohen, this bankruptcy filing and subsequent acquisition by Picea represents a critical juncture for ensuring iRobot's long-term viability. He emphasized that the move is designed to bolster the company's financial health and maintain uninterrupted service for its consumers, business partners, and supply chain. Importantly, current Roomba device owners are not expected to experience any service disruptions, as the company has pledged continued functionality for its app, customer programs, and product support.
This development follows the dissolution of a previous acquisition attempt by Amazon in early 2024, which faced intense regulatory scrutiny. After Amazon withdrew its offer, iRobot underwent significant restructuring, including a change in leadership and a workforce reduction of approximately 30%. Earlier in the year, the company had expressed serious concerns about its future as a going concern, citing various challenges such as tariffs, macroeconomic shifts, declining consumer demand, and increased competition. These factors had already contributed to a 35% drop in stock value in March, with shares largely remaining below $5 in the subsequent months. The latest losses mean iRobot's shares have lost about 85% of their value in 2025.
The journey of iRobot reflects the dynamic and often unpredictable nature of the tech market, where innovation meets economic realities. While the path to recovery through Chapter 11 bankruptcy is challenging, the planned acquisition by Picea offers a fresh start for iRobot, potentially allowing it to stabilize and innovate further in the competitive robotics industry. This situation highlights the importance of adaptability and resilience for companies navigating complex market forces.