Pomerantz Law Firm Announces the Filing of a Class Action Against iRobot Corporation and Certain Officers – IRBT
NEW YORK, July 10, 2025 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against iRobot Corporation (“iRobot” or the “Company”) (NASDAQ: IRBT) and certain officers. The class action, filed in the United States District Court for the Southern District of New York, and docketed under 25-cv-05563, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired iRobot securities between January 29, 2024 and March 11, 2025, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are an investor who purchased or otherwise acquired iRobot securities during the Class Period, you have until September 5, 2025, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
iRobot designs, builds, and sells robots and home innovation products in the United States, Europe, the Middle East, Africa, Japan, and internationally. The Company’s portfolio of home robots and smart home devices features proprietary technologies for the connected home and advanced concepts in cleaning, mapping and navigation. iRobot is primarily known for its robot vacuum cleaner (“RVC”) products sold under the “Roomba” brand name.
While iRobot’s Roomba was the first commercially successful RVC, iRobot’s business has steadily declined over the past decade, apart from a brief sales bump during the COVID-19 pandemic. Competitors from China undercut the luxury-priced Roomba, while other consumer electronics firms like Samsung and SharkNinja introduced their own RVCs. By 2016, iRobot’s market share had dropped to 64% in 2016, and then to only 46% by 2020.
Investors believed that iRobot was saved when, in August 2022, iRobot entered into a merger agreement with Amazon.com, Inc. (“Amazon”) pursuant to which Amazon would acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7 billion (the “Amazon Acquisition”). In a joint press release announcing the Amazon Acquisition, iRobot’s then Chief Executive Officer (“CEO”) Colin Angle was quoted as stating, in relevant part, “Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission. I’m hugely excited to be a part of Amazon and to see what we can build together for customers in the years ahead.”
However, in January 2024, Amazon and iRobot announced that they had mutually agreed to terminate the Amazon Acquisition, citing regulatory concerns. Specifically, the companies stated that there was “no path to regulatory approval in the European Union” and reports circulated that the U.S. Federal Trade Commission was in the process of drafting a lawsuit that would seek to stop the deal. Concurrent with this announcement, iRobot also reported that Colin Angle would step down from his role as CEO, and that the Company would be cutting approximately 350 employees, representing 31% of iRobot’s workforce.
Notwithstanding the termination of the Amazon Acquisition and the subsequent job cuts, the Company has consistently maintained that it is “confident in [its] ability to build on [its] legacy of innovation as a standalone company and to navigate this period successfully.” Moreover, in the wake of the Amazon Acquisition’s termination, iRobot touted that it would be implementing an operational restructuring plan (the “Restructuring Plan”)—which the Company has sometimes referred to as “iRobot Elevate”—“designed to position the Company for stabilization in the current environment, while focusing on profitability and advancing key growth initiatives to extend its market share in the mid-tier and premium segments.” The Restructuring Plan, according to the Company, would “enable [it] to chart a new strategic path for sustainable value creation.”
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) iRobot overstated the extent to which the Restructuring Plan would help the Company maintain stability after the termination of the Amazon Acquisition; (ii) as a result, it was unlikely that iRobot would be able to profitably operate as a standalone company; (iii) accordingly, there was substantial doubt about the Company’s ability to continue as a going concern; and (iv) as a result, Defendants’ public statements were materially false and misleading at all relevant times.
On March 12, 2025, iRobot issued a press release reporting its fourth quarter and full year 2024 financial results. For the quarter, iRobot reported a loss of $2.06 per share on revenue of $172 million, representing a 44% year-over-year decline. iRobot also cautioned investors that “there can be no assurance that [iRobot’s] new product launches will be successful due to potential factors, including, but not limited to consumer demand, competition, macroeconomic conditions, and tariff policies.” Accordingly, “[g]iven these uncertainties and the implication they may have on the Company’s financials, there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least 12 months from the date of the issuance of its consolidated 2024 financial statements.” In addition, the press release stated that, in light of the foregoing developments, iRobot was cancelling its fourth-quarter and full-year 2024 results conference call and webcast, and that the Company would not be providing a 2025 outlook.
Market analysts were quick to comment on iRobot’s announcement. For example, on March 12, 2025, an analyst from Seeking Alpha downgraded iRobot to a sell rating from a hold rating “due to [a] bleak outlook,” stating that “iRobot’s business prospects have deteriorated significantly since the Amazon acquisition fell through, leading to massive layoffs and growing losses,” “Q4 earnings were disastrous, missing guidance and showing worsening gross margins due to excess inventory and lower sales volumes,” “iRobot’s future is uncertain, with substantial doubts about its viability within the next 12 months, despite ongoing discussions with its primary lender,” and that the Company’s “survival hinges on new Roombas being a hit, which seems unlikely.” That same day, in an article entitled “Why iRobot Stock Is Crashing Today,” The Motley Fool stated, in relevant part, that “iRobot’s costly restructuring efforts -- including a 50% workforce reduction -- have yet to yield stability.”
On this news, iRobot’s stock price fell $3.255 per share, or 51.58%, over the following two trading sessions, to close at $3.055 per share on March 13, 2025.
After the end of the Class Period, in May 2025, iRobot experienced a short squeeze—i.e., a rapid increase in the price of a stock owing primarily to an excess of short selling of a stock rather than underlying fundamentals—after it was announced that U.S. tariffs on European Union imports would be delayed until July 2025. However, notwithstanding the increase in the Company’s stock price, market analysts noted that iRobot’s underlying fundamentals remained highly concerning. For example, on May 29, 2025, Seeking Alpha stated that iRobot’s “[t]echnical indicators have turned bullish short-term, but the company’s cash burn and deteriorating financials outweigh these positives” and “Q1 [2025] results revealed falling revenue, worsening losses, shrinking cash reserves, and declining gross margins, signaling severe operational stress.”
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
Attorney advertising. Prior results do not guarantee similar outcomes.
CONTACT:
Danielle Peyton
Pomerantz LLP
dpeyton@pomlaw.com
646-581-9980 ext. 7980sec
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