iRobot’s Bankruptcy Path: Shareholders Face Wipeout in Takeover Plan

The equity story for iRobot Corporation is approaching a definitive, and painful, conclusion for its public shareholders. The company’s shares, now relegated to over-the-counter (OTC) trading under the ticker IRBTQ, plunged approximately 17.6% in a recent session to $0.1565. This steep decline underscores the severe constraints facing investors as the robot vacuum maker navigates a U.S. Chapter 11 bankruptcy process initiated in December 2025.

iRobot’s exit from the Nasdaq exchange has been a swift descent. Trading was first suspended on December 22, 2025, followed by an official delisting announcement on January 13, 2026. The stock now trades exclusively on the OTC markets, a venue often associated with heightened risk and lower liquidity. The latest double-digit percentage drop is a direct reflection of the company’s ongoing financial restructuring under court supervision.

The Restructuring Blueprint: A Takeover and Cancellation of Shares

At the heart of the Chapter 11 proceedings is a definitive agreement with its secured lender and primary manufacturing partner, Picea. Entities linked to Picea—specifically Shenzhen PICEA Robotics Co., Ltd. and Santrum Hong Kong Co., Limited—are positioned to acquire iRobot and take it private. The timeline aims to finalize this court-supervised transaction by February 2026.

A critical provision of the plan spells disaster for current equity holders. iRobot has stated that all existing common shares are slated for cancellation upon the deal’s completion as part of the bankruptcy process. This effectively signals a total loss of investment for public shareholders who retain their positions.

The Road to Chapter 11: A Failed Amazon Deal and Cost Cuts

iRobot’s current predicament is deeply intertwined with the collapse of its sale to Amazon.com, Inc. In January 2024, Amazon tabled a $1.7 billion acquisition offer. The deal was mutually terminated after it became clear that regulatory approval, particularly from the European Commission, would not be forthcoming.

Should investors sell immediately? Or is it worth buying iRobot?

In the aftermath, iRobot embarked on significant cost-cutting initiatives and operational restructurings, which included substantial workforce reductions. However, these measures proved insufficient to achieve lasting financial stability, ultimately leading to the Chapter 11 filing at the end of 2025.

Adding a layer of geopolitical complexity to the Picea acquisition are concerns raised in Washington. Since early January 2026, some members of the U.S. Congress have called for a national security review of the planned takeover by the China-linked buyer consortium. While this could potentially delay proceedings or introduce additional stipulations, it does not alter the fundamental outcome for shareholders: the planned eradication of the publicly traded stock.

Outlook: The Final Chapter for Public Equity

With the bankruptcy process underway and the Picea acquisition targeted for February 2026, the foreseeable future for iRobot’s publicly traded shares is decidedly bleak. The company has scheduled a provisional earnings release date for February 2026, but its relevance for retail investors is minimal given the insolvency context.

The handful of analysts still covering the stock reflect this reality, with a prevailing consensus rating of "Reduce." This advice starkly highlights the severely compromised investment thesis for iRobot shares at this advanced stage of restructuring, where the extinguishment of equity is the central, unavoidable fact.