Bedford, Massachusetts – Following concerns raised in its recent earnings report, iRobot Corp. faced a significant drop in its stock price on Wednesday. The consumer robotics company announced that there is doubt surrounding its ability to continue operating, prompting its board to initiate a strategic review to consider options such as debt refinancing and a potential sale.
The decline in iRobot’s shares came after its failed acquisition by Amazon.com Inc. The tech giant backed out of the deal last year due to regulatory issues with European Union regulators. This setback, coupled with ongoing struggles faced by iRobot, has led to a record intraday decline in the company’s stock price.
Carlyle Group Inc. provided a $200 million loan to iRobot in 2023, when the company was experiencing cash burn. Despite the failed Amazon acquisition, Carlyle still holds the debt, charging iRobot above-average interest rates. The company is now looking to amend the loan, incurring additional fees paid through more debt.
In its fourth-quarter earnings report, iRobot reported a net loss of $77.1 million, attributing a 44% decline in revenue to various factors, including promotional spending and competitive challenges. The company’s cash reserves have decreased from the previous year, even with a drawdown of restricted cash earmarked for inventory purchases.
Looking ahead, iRobot expressed uncertainty about the success of new product launches due to factors such as consumer demand, competition, and tariff policies. The company is facing ongoing challenges that it aims to address through innovative products and strategic decision-making.