Red Mountain Capital takes stake in iRobot, urges changes to boost value
Red Mountain Capital Partners LLC on Tuesday disclosed a 6.1% stake in iRobot Corp. , signaling its intent to seek changes at the Roomba robotic vacuum cleaner maker. In a letter submitted to the Securities and Exchange Commission with its disclosure, Red Mountain expressed concern about iRobot stock's underperformance since its initial public offering in 2005 and urged the company to take steps to improve its share value. The investment firm also blamed iRobot's weak profitability on its focus on "subscale" businesses instead of focusing on high-margin home robots. Red Mountain recommended iRobot exit those unprofitable sectors to focus more on home robot operations. Shares of iRobot rose 0.4% in after-hours trading. The stock is down 4.4% year to date.
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