Actions of I robot (NASDAQ:IRBT) fell 14.2% on Thursday as investors speculated on the implications of an upcoming meeting of the US Federal Trade Commission (FTC) on AmazonIt is (NASDAQ:AMZN) pending the acquisition of the domestic robotics specialist. However, after the regular session closed, iRobot stock fell another 40% after hours following a separate report that European regulators are considering blocking the deal.
Amazon’s bluff seems to have backfired
Recall that iRobot stock also fell last week amid reports that Amazon had opted not offer concessions to European Union (EU) antitrust regulators as it works to clear its imminent purchase of maker Roomba. The move sparked speculation about whether Amazon was content to let the acquisition fail or was instead bluffing European regulators, given earlier reports that the deal was previously expected to gain approval unconditional.
Investors were already on edge this week after a U.S. federal judge blocked another pending case. merger between JetBlue And Spirit Airlines and amid concerns that an FTC meeting scheduled for next week on an undisclosed topic could involve the Amazon-iRobot merger.
However, after the close of the regular market session today, The Wall Street Journal reported that during a meeting with European Commission (EC) officials earlier today, Amazon representatives were told that the deal would likely be rejected absent concessions to address the company’s antitrust concerns. EU.
What’s next for iRobot investors?
It remains to be seen whether Amazon will pursue this acquisition. The $1.7 billion purchase price for the deal is relatively inconsequential for the tech giant, given its market cap of $1.59 trillion. But bringing iRobot under its wing would also significantly bolster Amazon’s smart home ambitions, especially given iRobot’s enviable trove of patents for smart home and robotic navigation.
iRobot could also continue as a standalone company, although it has work to do to reorganize its research and development, sales and marketing spending and to clean up its balance sheet after taking on additional debt to finance its operations in awaiting the conclusion of the agreement. completion.
In the meantime, it’s not surprising to see iRobot’s stock fall following this news.
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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 holds positions and recommends Amazon and iRobot. The Motley Fool has a disclosure policy.
Why iRobot Stock Fell Today was originally published by The Motley Fool
