iRobot investors face class action lawsuit over alleged stock manipulation.

Bragar Eagel & Squire is representing investors who suffered losses in iRobot Corporation (IRBT) between January 29, 2024 and March 11, 2025. A class action lawsuit has been filed in the United States District Court for the Southern District of New York. Investors have until September 5, 2025, to apply to the Court to be included in the lawsuit.

iRobot Corporation (IRBT) is facing a significant legal challenge as a class action lawsuit alleges misstatements and omissions regarding the company's ability to continue as a going concern. The lawsuit, filed on July 20, 2025, in the United States District Court for the Southern District of New York, accuses iRobot of overstating the benefits of its Restructuring Plan and failing to disclose substantial doubt about its ability to continue as a going concern.

The lawsuit, represented by Bragar Eagel & Squire, P.C., claims that iRobot made false and/or misleading statements and/or failed to disclose that its Restructuring Plan, known as iRobot Elevate, was unlikely to help the company maintain stability after the termination of the Amazon Acquisition. The complaint also alleges that executives did not disclose critical risks such as supply chain fragility and declining consumer demand.

Investors who purchased or acquired securities in iRobot between January 29, 2024, and March 11, 2025, are encouraged to apply to the Court to be included in the lawsuit. The deadline for applying to be named lead plaintiff is September 5, 2025. Lead plaintiff candidates must demonstrate significant financial loss and the ability to represent the class.

The lawsuit comes amid a period of financial struggle for iRobot. On March 12, 2025, the company reported a loss of $2.06 per share on revenue of $172 million, representing a 44% year-over-year decline. The company also cautioned investors that there was substantial doubt about its 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.

The lawsuit argues that iRobot's Restructuring Plan was built on false premises and that executives downplayed reliance on Amazon's infrastructure and omitted critical risks. These omissions have left investors questioning whether the company can survive without external support. The company'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.

Investors who purchased shares during the Class Period (January 29, 2024, to March 11, 2025) may be eligible for compensation if the case succeeds. The September 5 deadline is pivotal: investors must file to be named lead plaintiff by this date. Even those not seeking lead status should consult legal counsel to assess eligibility.

While iRobot's defense team argues the lawsuit lacks merit, the plaintiffs' case is bolstered by the stark contrast between pre-March 2025 statements and the subsequent disclosures. The company's stock remains volatile, and a negative ruling or settlement could further strain its finances.

Investment Implications: Proceed with Caution
For investors holding IRBT shares, the calculus is grim. The stock trades at a fraction of its pre-lawsuit value, and its future hinges on factors beyond its control:
1. Legal Outcome: A ruling against iRobot could trigger fines, settlements, or operational changes that sap liquidity.
2. Operational Viability: Without a turnaround in revenue or cost management, insolvency remains a real risk.
3. Investor Sentiment: The lawsuit has already eroded trust; any further missteps could amplify selling pressure.

Conclusion: Exit Before the Deadline?
The evidence suggests that iRobot's prospects are dimming, and the legal battle adds existential risk. While the stock's current price reflects some of these concerns, the September 5 deadline creates a critical window for investors to evaluate their positions. Recommendation: Exercise extreme caution. Consider exiting positions or hedging exposure, as the company's path to profitability remains unclear. Even if you don't pursue lead plaintiff status, consult a securities attorney to understand recovery options. The road ahead for iRobot is fraught with uncertainty—and the clock is ticking.

References:
[1] https://www.globenewswire.com/news-release/2025/07/20/3118355/0/en/Bragar-Eagel-Squire-P-C-Reminds-Investors-in-IRobot-IRBT-of-the-Class-Action-Lawsuit-and-Encourages-Investors-to-Inquire-About-Their-Rights.html