Shares of iRobot Corporation (NASDAQ:IRBT) fell over 16% on Monday after the company’s highly anticipated 1.7 billion merger deal with Amazon.com, Inc. (NASDAQ:AMZN) fell apart, taking its stock below 52-week lows.
Shares in the company recovered during Monday afternoon, to reach a 7% daily drop at the time of this writing. The company, however, added over 59% in losses during the past month in anticipation of a decision by the European Commission on the deal’s viability.
While Amazon is compensating the robot vacuum company with a $94 million termination fee for backing out of the deal, the bad news is causing the company to enter a restructuring phase.
iRobot said it plans to lay off around 350 employees (about 30% of its workforce), while its co-founder Colin Angle resigned as CEO, leaving command to current executive vice president and chief legal officer Glen Weinstein, who will oversee the restructuring as interim CEO.
The high-profile deal, which was first announced in August 2022, raised the attention of the U.K.’s antitrust watchdog in April of last year, yet it wasn’t until the European Union’s antitrust regulators opened a full investigation into the deal in June 2023 that the company’s shares started on their most recent downward trajectory.
Did A Short Seller Really See It Coming? Short seller Spruce Point Capital, which is led by manager Ben Axler, took to X to boast its long-standing bearish position on iRobot.
“Sad day for $IRBT. Wasn’t there a short activist that constantly warned about that company? I bet that guy’s twitter feed is blowing up kudos and apologies from all the trolls over the years,” Spruce Point Capital said jokingly on X.
The firm has had a short position in iRobot since 2017 when it warned that rising competition from Sharkninja Inc (NYSE:SN) was at the time a threat to iRobot’s bottom line.
In 2019, Spruce Point issued another short report, arguing iRobot had been “covering up weakening fundamentals and growth prospects, questionable reliability and accuracy of the financial guidance.”
In 2020, the firm issued a report warning against investing in the company, saying that investor enthusiasm was rooted in speculation around the growing robotics market.
“We note that much of the hype came from Amazon.com, Inc. and Google Inc [Alphabet Inc] (NASDAQ:
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