A class action lawsuit was filed against iRobot Corporation (IRBT) by Levi & Korsinsky on July 7, 2025. The plaintiffs (shareholders) alleged that they bought IRBT stock at artificially inflated prices between January 29, 2024, and March 11, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought iRobot stock during that period can click here to learn about joining the lawsuit.
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iRobot is an American technology company that specializes in developing consumer-focused robots. Amazon (AMZN) had offered to acquire iRobot in a deal valued at $1.7 billion. However, the acquisition was eventually terminated by mutual agreement on January 29, 2024, due to regulatory hurdles, specifically the lack of regulatory approval from the European Union.
iRobot’s claims about the true impact of its restructuring plan, which was intended to stabilize the company following the termination of Amazon’s deal, are at the heart of the current complaint.
iRobot’s Misleading Claims
According to the lawsuit, iRobot and four of its current and/or former senior officers (the Defendants) repeatedly made false and misleading public statements throughout the Class Period. In particular, they are accused of omitting truthful information about the extent to which the Restructuring Plan would help iRobot maintain stability after the termination of the Amazon Acquisition in January 2024, and ancillary issues, from SEC filings and related material.
During the Class Period, iRobot disclosed an Operational Restructuring Plan aimed at aligning the company’s cost structure with near-term revenue expectations and improving profitability. The plan included strengthening its brand, driving product innovation, and reshaping its go-to-market approach.
Furthermore, the updated strategy would prioritize iRobot’s most profitable customers, regions, and sales channels, particularly its expanding direct-to-consumer business. At the same time, the company would adjust its spending balance across pricing, promotions, and demand generation to maximize overall returns.
Finally, during an earnings call dated February 27, 2024, iRobot’s interim CEO stated that management and the board were confident in the company’s ability to build on its legacy of innovation as a standalone business and to navigate this period successfully.
However, subsequent events (detailed below) revealed that the defendants had failed to inform investors about the true impact of iRobot’s restructuring plan and its profitability potential.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the company’s business practices and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the company’s profitability prospects and its ability to continue as a going concern.
The information became clear on March 12, 2025, when iRobot released its fourth-quarter and full-year fiscal 2024 results. The company reported a loss of $2.06 per share on revenue of $172 million, representing a 44% year-over-year decline.
iRobot also informed investors that “there can be no assurance its new product launches will be successful, due to potential factors including, but not limited to, consumer demand, competition, macroeconomic conditions, and tariff policies.”
Moreover, the company cast significant doubt on its ability to continue as a going concern for at least 12 months from the release date of its 2024 financial statements, citing existing uncertainties and their potential impact on its financial results. Following this announcement, IRBT stock plunged 35.7%.
To conclude, the defendants misled investors about the true state of iRobot’s financial health following Amazon’s terminated acquisition deal, casting significant doubt on the company’s ability to continue operations. Due to these issues, IRBT stock has lost 58% so far this year.
