From Nasdaq:

Shares of iRobot Corporation (NASDAQ: IRBT) dropped over 16% after the company’s $1.7 billion merger deal with Amazon.com, Inc. fell apart, sending its stock to 52-week lows. Shares recovered to a 7% drop by Monday afternoon, resulting in 59% losses over the past month.

iRobot is receiving a $94 million termination fee from Amazon. The company plans to lay off 350 employees (about 30% of its workforce) and CEO Colin Angle has resigned, leaving command to Glen Weinstein.

Spruce Point Capital, a short seller, has had a short position in iRobot since 2017, citing concerns about competition and weakening fundamentals. The firm has been bearish on iRobot for years, warning investors against speculation in the growing robotics market.

The European Commission probed the deal and it threatened to harm competition in the vacuum industry, leading to concerns about anti-competitive practices. The deal’s termination is causing iRobot to pause product development outside its vacuum business and close offices in underperforming markets.

Amazon could face challenges in future acquisitions if this event is seen as a precedent. The company is currently facing an antitrust lawsuit from the FTC and 17 states, accusing it of monopolizing online retail.

While iRobot’s stock took a hit after the failed merger with Amazon, the company is now in a phase of restructuring after receiving a significant termination fee. Short seller Spruce Point Capital’s long-standing bearish position on iRobot seems to be justified. On the other hand, the failure of the deal may have implications for Amazon’s future acquisitions due to antitrust scrutiny.



Read more: Short Seller Does Victory Lap After Amazon Deal Dies — What Happened To iRobot?