(Bloomberg) — IRobot Corp., the consumer robotics company that Amazon.com Inc. once planned to buy for more than $1 billion, tumbled on Wednesday after raising a “substantial doubt” about its ability to continue operating.
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The Bedford, Massachusetts-based company warned in its earnings results that there’s doubt about whether it can continue as a going concern. The firm’s board has begun a formal strategic review to evaluate options, including refinancing its debt and exploring a potential sale, according to the statement. Shares plunged as much as 42% to $3.63 in New York, a record intraday decline for the stock, which made its public debut in November 2005.
Amazon abandoned its plans to buy the Roomba maker last year after clashing with European Union regulators who had threatened to block the deal, demonstrating the intense pressure the tech giant was facing from antitrust regulators on both sides of the Atlantic. The fallout for iRobot, which had already been struggling, was swift. Its shares tumbled the most in years, and the company’s market value stood at less than $200 million as of Tuesday.
Carlyle Group Inc. provided a $200 million loan through its private credit arm in 2023 to iRobot, which was burning cash at the time. The financing was intended to provide the company some liquidity while antitrust regulators reviewed the planned Amazon takeover.
Since the Amazon deal never materialized, Carlyle is still holding onto the debt. The lender was able to charge the company 9 percentage points over the Secured Overnight Financing Rate, well above norms on direct loans when it was inked.
The company is paying a fee in order to amend the loan, according to a Wednesday filing. That will include $3.6 million, or about 2% of the total loan outstanding, which will be paid with additional debt.
The company reported a net loss of $77.1 million in the fourth quarter ended on Dec. 28, according to Wednesday’s statement. At year-end, iRobot held $134 million in cash or cash equivalents, up from the previous quarter but down from the year-ago level. The figure includes a $40 million draw down of restricted cash that iRobot said it planned to use to purchase inventory.
iRobot reported a 44% slide in revenue in the fourth quarter from a year earlier, attributing the decline to promotional spending, the timing of orders from its largest customer for the holiday season and “ongoing competitive challenges that the company is addressing” with new product launches.
