And How Arbiter AI’s Four-Step Process Could Have Saved them
By Economic Sentinel
iRobot Corporation (NASDAQ: IRBT), the pioneering maker of the Roomba robotic vacuum with over 50 million units sold globally since 2002, filed for pre-packaged Chapter 11 bankruptcy on December 14, 2025, in the U.S. Bankruptcy Court for the District of Delaware. Under a restructuring support agreement with its secured lender and primary contract manufacturer, Shenzhen PICEA Robotics Co., Ltd. and Santrum Hong Kong Co., Limited (collectively “Picea”), Picea will acquire 100% of iRobot’s equity by canceling approximately $254 million in debt, including a $190 million 2023 refinancing loan and $74 million in manufacturing claims. The company expects to emerge from the process by February 2026, continuing operations, product development, and its global presence.
The downfall followed the January 2024 termination of Amazon’s $1.7 billion acquisition after prolonged FTC and EU antitrust scrutiny, persistent revenue declines (Q3 2025 revenue down 24.6% to $145.8 million), ongoing losses, mounting debt over $228 million with cash at just $24.8 million, U.S. tariffs costing $23 million in 2025 (including $3.4 million owed to U.S. Customs), production delays, and fierce competition from lower-priced Chinese rivals eroding market share. Shares plunged over 90% in 2025, trading in penny territory post-filing, with equity holders facing wipeout.
Short sellers intensified the decline. Spruce Point Capital held a bearish position since 2015, issuing forensic reports on “weakening fundamentals, financial control issues,” unreliable guidance, and management “unjustly enriching itself” via compensation despite poor results, estimating 60-80% downside. High short interest contributed to volatility, with retail squeezes offering brief relief before bankruptcy news crushed the stock. Critics, including founder Colin Angle, called the antitrust block “avoidable” and value-destroying, forcing the company toward insolvency and Chinese ownership.
Public records show patterns aligning with abusive short-selling playbooks—long-term bearish campaigns, elevated short floats, and pressures compounding vulnerabilities like debt and tariffs. Via Economic Sentinel’s Arbiter AI platform, partnered with syndication networks like InvestorBrandNetwork and 5000 other media outlets, with the investigative powerhouse US~Observer held in reserve for clubbing the wrong-doers, Arbiter AI provides a proven four-step process to counter threats rapidly, often boosting value in similar cases.
Arbiter AI could have defended iRobot proactively:
- The Audit with Arbiter AI: AI scans and investigations detect shorts, regulatory biases, and issues like tariff/debt risks early, flagging Spruce Point’s decade-long bet and antitrust misalignment in 2023-2024.
- Notify Then Attack the Shorts: Targeted exposure of tactics through probes into long-term bears, publishing evidence to force transparency, deter aggression, and ignite squeezes amid high short pressure.
- Notify Then Attack the Lawsuit/Licenses: Dismantling predatory claims with evidence, protecting management from overreach as in past dismissals of false securities allegations.
- Notify Then Attack the SEC/DOJ/Regulators: Challenging overreach by amplifying deal block criticisms, pressuring accountability to potentially preserve acquisition or ease fallout.
Proactive engagement could result in stabilized liquidity, countered narratives, and protected shareholders from erasure, aligning with what we outline in “Four Steps of Short-Selling Destruction” and “Countering the Abusive Short Sell is Now an Option.”
Companies facing similar threats: Visit EconomicSentinel.com for assessments. Related stories: “Have Major Brokerage Officers Flouted SEC Rules?,” “US~Observer Investigating Morpheus Research’s Alleged Tactics,” “SEC Investigation Five Years Too Late.”
