iRobot Corp. (NASDAQ: IRBT) filed for pre-packaged Chapter 11 bankruptcy in December 2025, marking the culmination of several converging challenges that steadily weakened the company’s financial position. After the collapse of its proposed $1.7 billion acquisition by Amazon (NASDAQ: AMZN) in January 2024 following extended U.S. and European antitrust reviews, iRobot faced declining revenue, ongoing losses, and a heavy debt burden. These issues were compounded by rising tariff costs, production delays, and intensifying competition from lower-priced manufacturers, leaving the company with limited liquidity and strategic flexibility.
As financial stress mounted, sustained short-selling pressure and negative market sentiment amplified volatility and accelerated the stock’s decline, with shares falling more than 90% during 2025. Under the restructuring plan, secured lenders are set to assume full ownership through debt cancellation, effectively eliminating existing equity. The outcome highlights how regulatory delays, leverage, external cost shocks, and persistent bearish positioning can intersect to erode investor confidence and force restructurings that wipe out public shareholders.
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