iRobot Corporation (NASDAQ: IRBT), the maker of Roomba robotic vacuums, has filed for Chapter 11 bankruptcy protection in Delaware and disclosed a pre-packaged restructuring plan that will see the company go private. The announcement triggered a sharp 13.80% drop in its stock price, with shares trading around $4.32, a dramatic fall from its all-time high of $161.16 in early 2021.
Under the agreement, Shenzhen PICEA Robotics Co., Ltd., iRobot's primary contract manufacturer and secured lender, along with Santrum Hong Kong Co., Limited, will acquire 100% of iRobot's equity through the court-supervised process. The plan stipulates that all existing common shares will be canceled, leaving current shareholders with no recovery. iRobot expects to complete the restructuring and transition to a privately held entity by February 2026, after which it will be delisted from the Nasdaq.
Despite the ownership upheaval, iRobot has emphasized that day-to-day operations, including Roomba production and app functionality, are expected to continue uninterrupted. Court motions have been filed to ensure employees and vendors are paid during the process.
The bankruptcy filing culminates years of financial strain for iRobot. The company reported third-quarter 2025 revenue of $145.8 million, down from $193.4 million a year prior, with cash reserves dwindling to $24.8 million. Mounting pressures included intense competition from lower-priced rivals like Ecovacs Robotics, $23 million in added costs from U.S. tariffs, and the collapse of a planned $1.7 billion acquisition by Amazon due to regulatory scrutiny.
As part of the deal, Picea Robotics will cancel $190 million in debt from 2023 and an additional $74 million owed under manufacturing agreements. The move shifts iRobot from a standalone public company to a manufacturing-led private ownership model. Investors are now advised to monitor Delaware court proceedings for plan confirmation and any potential competing bids, as the stock's movement is now driven entirely by bankruptcy event risks rather than traditional financial metrics.
