BlackRock Just Upped Its Bet on iRobot (IRBT) Stock

Source: rafapress /

Today’s price action has been impressive, particularly for certain beaten-down stocks. For example, shares of iRobot (NASDAQ:IRBT) stock are rocketing 8% higher today on news that BlackRock (NYSE:BLK) has increased its stake in the Roomba maker. This move is notable, considering that IRBT stock has lost roughly half of its value since the start of the year following a report that European Union (EU) regulators plan to block the company’s merger with Amazon (NASDAQ:AMZN).

BlackRock’s increased position was noted in a Form 13-G filing issued yesterday and investors are clearly pricing in some enthusiasm around the stock as a potential value pick. Now trading at only 0.5 times sales, IRBT stock has finally caught a bid from some institutional investors perhaps looking to bottom fish this decline.

Now, the question remains whether retail investors will jump aboard. Indeed, iRobot is still losing plenty of money and achieving profitability as a standalone company remains the chief concern. Let’s dive into what investors may want to make of this news today.

IRBT Stock Surges on Key BlackRock Investment

According to BlackRock’s most recent filing, this share purchase puts the investor’s stake in iRobot at more than 17% of all outstanding shares. That’s a significant amount and could signal that BlackRock may eventually pursue a takeover bid of some kind.

Given the interest that has already materialized around iRobot and its potential Amazon merger (which now seems unlikely to happen), investors have been left wondering what iRobot’s options are. A potential take-private deal, or some sort of alternative financing, could be the exit valve investors are looking for. This company may be one that requires a strategic partner to go to the next level and we’ve seen other influential investors take big stakes in companies to turn them around.

Ultimately, we’ll have to wait to see how this BlackRock investment plays out. It’s unclear at the moment what the rationale for this purchase is. But the market is certainly viewing this move with a positive lens today. I’d anticipate a positive move at least over the near-term for IRBT stock from here.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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