iRobot's 72% Plunge: Bankruptcy Filing and Chinese Takeover Spark Market Turmoil

Summary
• iRobot (IRBT) plunges 72% intraday to $1.21, erasing 85% of 2025 value
• Company files Chapter 11 bankruptcy, selling to Chinese manufacturer Picea Robotics
• Stock now trades below $1.10, with equity holders expected to be wiped out

iRobot’s catastrophic 72% intraday collapse has sent shockwaves through the market, driven by its Chapter 11 filing and impending delisting. The stock’s freefall—from a 52-week high of $13.06 to a current price of $1.21—reflects the existential crisis facing the Roomba pioneer. With Picea Robotics set to acquire the company, investors face a total loss scenario as iRobot transitions to private ownership. The $1.07 intraday low underscores the depth of the selloff, while the 322% surge in turnover highlights the frenzy among traders navigating this unprecedented collapse.

Bankruptcy Filing and Chinese Takeover Trigger 72% Plunge
iRobot’s 72% intraday freefall stems from its Chapter 11 bankruptcy filing and the announced acquisition by Picea Robotics, its primary contract manufacturer. The company, once a $3.56 billion market cap leader in 2021, now faces delisting as Picea acquires 100% of its equity under a restructuring plan. The move follows the collapse of Amazon’s $1.7 billion acquisition deal in 2024 and mounting pressures from U.S. tariffs, Chinese competition, and declining consumer demand. With equity holders expected to receive no recovery, the stock’s collapse reflects a total loss scenario for shareholders. The bankruptcy filing also eliminates iRobot’s public market presence, compounding the severity of the selloff.

Household Durables Sector Mixed as Whirlpool Holds Steady
While iRobot’s 72% plunge dominates headlines, the broader household durables sector remains resilient. Whirlpool (WHR), the sector’s largest player, trades down just 0.68%, reflecting its stronger balance sheet and diversified product portfolio. Unlike iRobot’s existential crisis, Whirlpool’s stability underscores the sector’s ability to weather disruptions. However, iRobot’s collapse highlights vulnerabilities in niche markets reliant on single-product dominance, contrasting with sector leaders’ diversified strategies.

Options and ETFs in a Bearish Play: Navigating iRobot's Collapse
• MACD: 0.458 (bullish divergence), Signal Line: 0.090, Histogram: 0.368 (momentum waning)
• RSI: 71.3 (overbought, bearish reversal likely)
• Bollinger Bands: Price at $1.21 (near lower band at $0.07), indicating extreme bearish pressure
• 200-day MA: $3.44 (price far below), 30-day MA: $2.53 (further bearish)

The technical landscape for iRobot is dire, with RSI overbought and Bollinger Bands signaling a potential breakdown below $1.07. The Vanguard Consumer Discretionary ETF (VCR), up 0.88%, offers a defensive play against sector-wide volatility. For options, two contracts stand out: IRBT20260618C1 and IRBT20280121C2.

• IRBT20260618C1 (Call, $1 strike, June 2026):
- IV: 166.22% (extreme volatility)
- Leverage: 1.99% (modest)
- Delta: 0.777 (high sensitivity to price)
- Theta: -0.0012 (slow time decay)
- Gamma: 0.211 (moderate sensitivity to price swings)
- Turnover: $13,196 (liquid)
- Payoff at 5% downside: $0.95 (minimal value)
- Why: High IV and delta make this call ideal for volatility plays, though leverage is low.

• IRBT20280121C2 (Call, $2 strike, January 2028):
- IV: 82.40% (moderate)
- Leverage: 2.99% (strong)
- Delta: 0.595 (balanced sensitivity)
- Theta: -0.0004 (slow decay)
- Gamma: 0.271 (high sensitivity to price swings)
- Turnover: $17,246 (liquid)
- Payoff at 5% downside: $1.15 (limited upside)
- Why: Strong leverage and gamma position this for long-term volatility, though IV is mid-range.

Aggressive bears should short IRBT20260618C1 into the $1.07 support level, while long-term volatility traders may consider IRBT20280121C2 for a speculative play on Picea’s restructuring.

Backtest iRobot Stock Performance
The backtest of IRBT's performance after a -72% intraday plunge from 2022 to now reveals a mixed outlook. While the stock experienced a significant decline, it showed resilience in the following days, with the 3-Day win rate at 45.21%, the 10-Day win rate at 43.24%, and the 30-Day win rate at 47.91%. This indicates that IRBT had a higher probability of rebounding in the short term following the plunge. The maximum return during the backtest period was 2.85% over 38 days, suggesting that while the stock could recover some lost ground, the overall performance remained muted.

iRobot's Delisting Imminent: Act Now on Equity Wipeout Outlook
iRobot’s 72% plunge signals the end of its public market existence, with delisting and equity wipeout now inevitable. The stock’s technical indicators—RSI overbought, Bollinger Bands at extremes—confirm a terminal breakdown. Investors must act swiftly: short-term traders should target the $1.07 intraday low, while long-term holders face total loss. The sector’s resilience, as seen in Whirlpool’s -0.68% move, contrasts sharply with iRobot’s collapse. Watch for Picea’s restructuring approval and the final delisting date. For now, the message is clear: exit IRBT immediately and pivot to sector leaders like WHR for stability.