iRobot, the maker of Roomba vacuums, files for bankruptcy and sells itself to Chinese company

Roomba Manufacturer iRobot Files for Chapter 11 Bankruptcy Protection

iRobot, the maker of the popular robotic vacuum cleaner Roomba, has filed for Chapter 11 bankruptcy protection. The company announced that it will be selling itself to Shenzhen PICEA Robotics Co., a Chinese contract manufacturer that currently produces Roombas for iRobot. Despite the bankruptcy filing, iRobot assured customers that there will be no disruptions to its app, customer service, or other functions.

Founded in 1990 by MIT roboticists, iRobot initially focused on designing robots for space exploration. However, the company gained widespread recognition with the launch of the Roomba in 2002, which was hailed as the first robotic vacuum cleaner for household floors. iRobot went public in 2005, and at one point, its stock price reached over $125 per share.

Unfortunately, iRobot’s fortunes took a turn for the worse when a planned acquisition by Amazon for $1.7 billion fell through in 2022 due to regulatory issues in the European Union. Following the failed deal, iRobot received a termination fee of $94 million from Amazon and began restructuring efforts to stabilize its business.

In September, iRobot issued a warning about declining sales as consumer spending decreased, indicating that the company was at risk of shutting down operations or filing for bankruptcy. The agreement with Picea will allow iRobot to continue operating without any disruptions to its app functionality, customer programs, supply chain relationships, or product support.

Impact on Stock Price

Following the announcement of the bankruptcy filing, iRobot’s stock price plummeted by 72% in pre-market trading, dropping to $1.20 per share. The sharp decline reflects investor concerns about the company’s financial stability and future prospects.

Conclusion

Despite the challenges faced by iRobot, the company remains committed to serving its customers and maintaining its operations. The acquisition by Picea Robotics Co. provides a lifeline for iRobot to restructure and rebuild its business for long-term sustainability. As the company navigates through the bankruptcy process, customers can expect to continue receiving the same level of service and support from iRobot.