iRobot Corporation (NASDAQ:IRBT) stock is getting hit on Monday after the company filed for Chapter 11 bankruptcy.
- iRobot stock is testing key support levels. Why did IRBT hit a new low?
What To Know: The Massachusetts-based maker of the Roomba robotic vacuum filed for bankruptcy protection on Sunday, according to an SEC filing. iRobot stock hit new lows Monday morning following the announcement.
iRobot said in the filing that it will go private after selling the company to Picea Robotics, which is the main manufacturer of the Roomba vacuum cleaner. The company said it will continue to pay its employees and fulfill customer obligations through the restructuring.
Several of the company’s executives were given cash retention bonuses to encourage them to stay on with the company through the restructuring period.
iRobot’s revenue has been in a trough recently. Even though the company beat expectations last quarter, it reported third-quarter revenue of $278.19 million, well below its peak of $544.83 million reported in February 2021. iRobot issued a going concern warning in March, saying that there was “substantial doubt” about its ability to remain in business.
According to Reuters, iRobot has been battling heavy competition from cheaper Chinese rivals, which forced the company to lower prices. Tariffs have also been a major headwind for the Roomba vacuum maker, which manufactures a majority of its products in Vietnam.
IRBT Price Action: iRobot shares were down 74.31%, trading at $1.20 at the time of publication on Monday, according to Benzinga Pro.
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