iRobot’s Public Market Journey Concludes with Chapter 11 Filing and Takeover

iRobot US4627261005

The iRobot Corporation, the maker of the iconic Roomba vacuum cleaning robots, has initiated a pre-arranged Chapter 11 bankruptcy process. This move will result in the complete acquisition of the company by its primary creditor and contract manufacturer, Picea. Shareholders will see the total loss of their investment, as all common stock is set to be canceled.

This announcement marks the end of a precipitous decline for the once high-flying stock. iRobot shares had already shed more than 10 percent in the days leading up to the filing and had plummeted approximately 98 percent from their peak in January 2021. Trading closed on Friday at $4.32, finalizing the company's status as a publicly listed entity.

iRobot's path to privatization follows years of mounting financial strain. Since 2021, the company has contended with declining revenue, supply chain disruptions, and intense competition from more affordable rivals, particularly from China. A critical blow came in January 2024 when a planned acquisition by Amazon collapsed due to regulatory opposition.

The company's dire financial state had become increasingly clear. Earlier this year, iRobot had warned of a potential bankruptcy. Its third-quarter 2025 results painted a stark picture: cash reserves had dwindled to just $24.8 million, the profit margin stood at negative 38.16 percent, and shareholder equity was deep in the red at -$26.9 million. Management had recently conceded it had exhausted all options for securing additional financing.

A Speculative Burst Fades

Interestingly, iRobot's stock experienced a brief, volatile surge in early December. Fueled by retail traders and rumors regarding potential U.S. government support for domestic robotics manufacturers, the share price skyrocketed by as much as 135 percent at one point over a five-day period. This short-lived speculative rally, amplified on social media platforms, proved incapable of overcoming the firm's fundamental business challenges.

The Restructuring Plan

The Chapter 11 filing is designed to stabilize iRobot's finances and facilitate a fresh start under new ownership. According to a restructuring agreement, Picea will assume control of 100 percent of the company's equity. The bankruptcy process is scheduled for completion by February 2026, after which iRobot will be delisted from the Nasdaq and operate as a private concern.

While equity investors face a total loss, iRobot has emphasized that day-to-day business operations are expected to continue normally throughout the proceedings. Under Picea's ownership, the plan is to deleverage the balance sheet and channel investment into product development. CEO Gary Cohen has framed the transaction as an opportunity to fortify the company's financial footing and ensure continuity for its customers.

The next definitive milestone is the anticipated conclusion of the Chapter 11 process by February 2026, formally transitioning iRobot into a privately held enterprise.