Why iRobot stock fell today
stock kid robot (IRBT -14.23%) It fell 14.2% on Thursday as investors speculated about the impact of the upcoming Federal Trade Commission (FTC) meeting. Amazon‘S (AMZN 1.18%) We are awaiting the acquisition of a company specializing in home robots. However, after the regular meeting ended, iRobot’s stock price plummeted. another 40% in after-hours trading, following separate reports that European regulators were planning to block the deal.
Amazon’s bravado appears to have backfired
Recall that iRobot stock also fell last week due to reports that it had been picked up by Amazon. ~ no Offers concessions to European Union antitrust regulators as it works to resolve Roomba maker’s impending purchase. The move has fueled speculation about whether Amazon was content to allow the acquisition to fail or whether it was calling EU regulators’ bluff.
Investors were already nervous after a U.S. federal judge blocked a separate pending merger this week. jet blue and Spirit Airlines There are concerns that an FTC meeting on an undisclosed topic scheduled for next week could include the Amazon-iRobot merger.
However, after the regular market closed today, wall street journal Amazon representatives reportedly were told in a meeting with European Commission (EC) officials this morning that the deal would likely be rejected without concessions to address the EU’s antitrust concerns.
What’s next for iRobot investors?
It is still unclear whether Amazon will pursue an acquisition. The $1.7 billion purchase consideration for this deal is relatively unimportant for the tech giant given its $1.59 trillion market capitalization. But taking iRobot under its wing would give Amazon’s smart home ambitions a major boost, especially considering iRobot’s enviable smart home and robotic navigation patents.
iRobot may continue on its path as an independent company, although it will have work to do to reorganize research and development, sales and marketing spending and clean up its balance sheet by taking on additional debt to fund operations while it awaits a deal. complete.
In the meantime, it’s no surprise that iRobot stock is falling on this news.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and iRobot. The Motley Fool has a disclosure policy.
