RADNOR, Pa.--(BUSINESS WIRE)--The law firm of Kessler Topaz Meltzer & Check, LLP reminds investors that the firm has filed an investor securities fraud class action lawsuit against iRobot Corporation (Nasdaq: IRBT) (“iRobot”) on behalf of those who purchased or otherwise acquired iRobot stock between November 21, 2016 and October 22, 2019, inclusive (the “Class Period”).
iRobot investors who purchased or otherwise acquired securities during the Class Period may, no later than December 23, 2019, seek to be appointed as a lead plaintiff representative of the class.
Investors who wish to discuss this securities fraud class action lawsuit or request additional information about this litigation are encouraged to contact Kessler Topaz Meltzer & Check attorneys James Maro, Jr. or Adrienne Bell at (844) 887-9500 (toll free) or online at: https://www.ktmc.com/irobot-securities-class-action?utm_source=PR&utm_medium=Link&utm_campaign=irobot.
iRobot is a global consumer robot company that designs and builds robots to assist with household tasks and has sold more than 25 million robots worldwide. iRobot’s most popular product line is its autonomous robotic vacuum cleaners, which iRobot first introduced with the Roomba Vacuuming Robot in 2002. iRobot’s products, including the Roomba line, purport to feature proprietary technologies and advanced concepts in cleaning, mapping, and navigation.
The Class Period commences on November 21, 2016, when iRobot announced it would acquire the iRobot-related distribution business of privately-held, Tokyo-based Sales on Demand Corporation. In a press release that day, iRobot said the acquisition would “better enable iRobot to maintain its leadership position and accelerate the growth of its business in Japan through direct control of pre- and post-sales market activities including sales, marketing, branding, channel relationships and customer service.”
On April 23, 2019, after the close of trading, iRobot surprised the market when it announced that quarterly revenues were below analyst expectations and also revealed surging inventory levels. Specifically, iRobot reported days in inventory (“DII”) of 140 for the three months ended March 30, 2019, compared to DII of 101 for the three months ended March 31, 2018. Inventory also rose to $181 million as of March 30, 2019, up from $112 million in April 2018. Following this news, iRobot’s stock price fell from $130.57 per share on April 23, 2019, to $100.42 per share on April 24, 2019, a decline of over 23% in one trading day.
On July 23, 2019, after the close of trading, iRobot cut its full-year earnings forecast. Specifically, fiscal year 2019 revenue guidance was lowered from a range between $1.28 billion and $1.31 billion, to a range between $1.2 billion and $1.25 billion, and earnings per share guidance was lowered from a range between $3.15 and $3.40 to a range between $2.40 and $3.15. Following this news, iRobot’s stock price fell from $89.63 per share on July 23, 2019, to $74.51 per share on July 24, 2019, a decline of nearly 17% in one trading day.
On October 22, 2019, after the close of trading, iRobot issued a press release reporting third quarter 2019 financial results. iRobot cut the high end of its revenue expectations for the year, from $1.25 billion to $1.21 billion, and said it rolled back price increases after a “suboptimal” customer response. iRobot reported increased inventory levels once again, with third quarter 2019 ending inventory of $248 million or 149 DII compared to the $161 million or 113 DII a year prior. Following this news, iRobot’s stock price fell from $54.03 per share on October 22, 2019, to $49.06 per share on October 23, 2019, a decline of over 9% in one trading day.
The complaint alleges that, throughout the Class Period, iRobot reported explosive, double-digit revenue growth, which it attributed to increasing demand for its Roomba products, expanded gross margin due to distributor acquisitions, greater brand awareness and technological innovation. In reality, iRobot was engaging in channel-stuffing in order to inflate its sales and revenues figures, and had acquired two of its largest distributors in order to facilitate and conceal this deceptive practice. As a result of these misrepresentations, iRobot shares traded at artificially inflated prices throughout the Class Period.
iRobot investors may, no later than December 23, 2019, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). For more information about Kessler Topaz Meltzer & Check, please visit www.ktmc.com.