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Amazon Stock: Amazon Acquires iRobot

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ecommerce giant Amazon (AMZN) announced a purchase agreement on Friday i robot (IRBT), maker of home cleaning robots such as Roomba vacuums, has been acquired for $1.7 billion in cash. The news sent Amazon’s stock plummeting, while iRobot’s stock skyrocketed.


Seattle-based Amazon said it will pay Bedford, Massachusetts-based iRobot $61 per share. The transaction is subject to customary closing conditions, including approval by iRobot stockholders and regulatory approvals.

On the stock market today, iRobot’s share price rose 19.1% to 59.54. He finished Thursday’s regular session unchanged at 49.99.

Meanwhile, Amazon shares fell 1.2% on Friday to close at 140.80.

Roomba Vacuum Cleaner Hot Prime Day Special

“Over the years, the iRobot team has proven their ability to reinvent the way people clean with incredibly practical and ingenious products,” said Dave, senior vice president of Amazon Devices. Limp said in a news release.

“Customers love the iRobot products, and I am excited to work with the iRobot team to invent ways to make their lives easier and more enjoyable,” he said.

Amazon already has a large consumer electronics business. It makes Alexa-enabled smart speakers, Fire TV streaming devices and TV sets, tablet computers, Kindle e-readers, and home security devices. We also experimented with home robotics using Amazon Astro’s home monitoring and companion robots.

With iRobot, Amazon gets Roomba robot vacuums, Braava robot vacuums, Aeris air purifiers, and other gadgets.

Roomba vacuums are often top sellers in the electronics category at Amazon Prime Day shopping events.

Amazon stock tops group

Amazon’s stock ranks first among 59 stocks in IBD’s Retail-Internet industry group, according to IBD Stock Checkup. However, the IBD Composite Rating is mediocre at 69 out of 100. The Composite Rating scores a stock’s key growth indicators against all other stocks, regardless of industry group.

IRobot’s stock ranks 6th out of 12 stocks in IBD’s Consumer Electronics and Products Industry Group. However, the overall rating is very low at 4.

IRobot reports three consecutive quarters of declining sales. Earnings for the June quarter were down 30% year-over-year to $255.4 million. It has also posted similar losses in the last three quarters.

The iRobot acquisition will give Amazon greater capabilities in the smart home market, said MKM Partners analyst Rohit Kulkarni.Amazon is the market alphabetof (GOOGL) Google and apple (AAPL), he said in a note to customers. Kulkarni rates Amazon stock as a buy with his price target of 170.

Follow Patrick Saitz on Twitter. @IBD_PSeitz For more articles on consumer technology, software and semiconductor stocks, please visit here.

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