The Roomba's ride is over. iRobot Corporation (IRBT), the Massachusetts-based maker of those circular robot vacuums that bump around your living room, filed for Chapter 11 bankruptcy protection on Sunday. The stock responded exactly how you'd expect, plummeting over 74% Monday morning to hit new lows at $1.20 per share.

Here's what's happening: iRobot is selling itself to Picea Robotics, which is actually the main manufacturer of Roomba vacuum cleaners. So in a weird twist, the company that makes the Roombas is buying the company that designs them. iRobot says it'll go private as part of the deal.

The Slow Decline

This didn't come out of nowhere. iRobot's revenue has been in freefall. Even though the company managed to beat expectations last quarter, it only pulled in $278.19 million in Q3 revenue. Compare that to the glory days of February 2021 when revenue hit $544.83 million. That's a brutal drop.

The company even issued a going concern warning back in March, essentially saying there was "substantial doubt" about whether it could stay in business. Translation: we might not make it.

Competition and Tariffs

What killed iRobot? Two things, mainly. First, cheaper Chinese competitors flooded the market, forcing iRobot to slash prices on its premium Roombas. Second, tariffs have been crushing the company since it manufactures most of its products in Vietnam.

During the restructuring, iRobot says it will keep paying employees and fulfilling customer orders. The company also handed out cash retention bonuses to key executives to keep them around through the bankruptcy process.