IRobot Stock Plummets on Word That Former Employee’s Firm Won $280 Million Military Contract
Shares of iRobot (NASDAQ: IRBT) fell sharply today after word spread that Alsip, IL-based Robotic FX—a rival firm led by a former iRobot employee—had beat the company out for a $280 million contract to provide improvised explosive devise (IED)-detection robots for the U.S. Army.
Last month, iRobot filed a pair of lawsuits against Robotic FX, including one that named its founder, Jameel Ahed. The suits claimed infringement on patents and misappropriation and misuse of confidential information related to Robotic FX’s Negotiator robot—the device it will manufacture under the new contract (see photo)—which iRobot said was a knock-off of its PackBot military robot.
Based in Burlington, MA, iRobot is a leading maker of military and commercial robots, most famously the Roomba robotic vacuum cleaner. It has previously supplied robots for military use, including its PackBot, which the U.S. military has employed since 2002 for reconnaissance and disabling bombs.
IRobot and other companies have already delivered some 5,000 explosives-hunting robots to the military, according to the Associated Press. However, in July, the Department of Defense issued an urgent request for more in order to combat the continued threat of IEDs, and that contract was awarded late Friday afternoon to Robotic FX. According to the firm’s press release, the five-year contract involves “an initial delivery order consisting of 101 robotic systems, new equipment training and 10 spare parts kits. Over the life of this contract the expected delivered quantities are 3,000 robotic systems and 1,000 sets of spare parts.”
IRobot’s stock closed down $5.35 (nearly 23 percent) at $18.27.