iRobot Files for Chapter 11 Amid Rising Competition and Tariff Pressures

• iRobot is seeking bankruptcy protection, with plans to beryllium purchased by its superior manufacturer.

• The institution has been seeing steep losses, higher costs, and little gross owed to the Trump administration's tariff policies.

• Amazon had antecedently sought to get the company, but was incapable to get regulatory approval.

• 10 stocks we similar amended than iRobot ›

Tech institution iRobot (NASDAQ: IRBT), the shaper of household vacuums and cleaning robots that see Roomba and Braava, filed for Chapter 11 bankruptcy extortion connected Sunday, little than 2 years aft a $1.7 cardinal buyout by Amazon (NASDAQ: AMZN) fell through.

The institution announced that it has expectations of being acquired by privately held Picea Robotics, its superior manufacturer, with the transaction expected to beryllium completed by February.

"Today's announcement marks a pivotal milestone successful securing iRobot's semipermanent future," CEO Gary Cohen said. "The transaction volition fortify our fiscal presumption and volition assistance present continuity for our consumers, customers, and partners. Together, we volition enactment to proceed advancing the industry-leading Roomba robots and astute location technologies that person defined the iRobot marque for much than 3 decades."

The Chapter 11 announcement is devastating for investors, who "will acquisition a full nonaccomplishment and not person betterment connected their investment," according to the company. Chapter 11 bankruptcy allows companies to proceed to relation nether tribunal supervision arsenic it reorganizes its debt.

Management said that iRobot is expected to proceed operations during the bankruptcy proceedings and reorganization, including functionality of its app, lawsuit programs, and merchandise support. The institution volition proceed to support planetary partnerships and proviso concatenation relationships arsenic it undergoes reorganization, it said.

iRobot banal traded astatine $4.32 earlier the announcement, but shares fell much than 65% aft markets opened this morning.

The institution faced superior challenges this year, with the banal falling sharply successful March arsenic President Donald Trump implemented his tariff argumentation connected galore countries. The bulk of iRobot's devices for the U.S. marketplace are manufactured successful Vietnam, which was taxable to 46% import duties nether Trump's tariff program. Costs for iRobot accrued by $23 cardinal this year. Meanwhile, income successful the U.S. dropped 33% successful the 3rd 4th from a twelvemonth ago.

Revenue successful the 3rd 4th was $145.8 million, down from $193.4 cardinal connected a year-over-year basis. The institution reported an operating nonaccomplishment of $17.7 million, pursuing a nett of $7.3 cardinal successful the 3rd 4th of 2024.