What happened

Shares of iRobot (IRBT -1.84%) came crashing down on Tuesday, as short-squeeze mania died down on Wall Street. The stock saw incredible gains in January as traders bought shares of companies with a high amount of short interest, hoping to induce a short squeeze. But it appears they're now moving on. As a result, iRobot stock was down 15% as of 10:40 a.m. EST.

So what

According to data from Nasdaq, a whopping 10.5 million shares of iRobot were sold short as of Jan. 15. This number has been rising for the last three months. For perspective, the company had more than 28.1 million shares outstanding as of its latest quarterly update. So roughly 37% of all shares are sold short. And given the stock's low trading volume, it would take 20.3 days to cover -- which is quite a long time as far as these things go. 

A rising red arrow breaks near the top, resulting in the tip of the arrow pointing down.

Image source: Getty Images.

This caused traders to buy shares of iRobot in January, hoping for a short squeeze like GameStop's. iRobot stock was up about 50% last month. However, now that GameStop stock is in a free fall, traders are abandoning the short-squeeze craze. That's why iRobot is down today.

Now what

This outcome was pretty predictable. Just last week, I highlighted iRobot as one of three stocks in my portfolio that could crash down once this short-term frenzy abated. However, as a long-term investor, I'm not concerned. In fact, I think those still betting against iRobot by shorting it might be missing the bigger picture. The home-cleaning robot space is competitive, yes. But, with its latest software update, the company is building a strong, direct relationship with its customers that should help it maintain its leadership position for years to come. To me, that's worth holding onto even as the stock falls today.