Symbotic, a technology company specializing in automated warehousing, has experienced a significant boost in both stock value and sales following its partnership with SoftBank to launch an offshoot venture called GreenBox. The creation of GreenBox aims to provide small and medium-sized businesses with access to automated warehouses. As part of the venture, Symbotic will hold a 35 percent stake in GreenBox, with SoftBank’s investment firm owning the remaining portion.
This news has generated excitement in the market, leading to a surge in Symbotic’s stock price. The company’s shares reached an all-time high of $64.14 on Monday, pushing its market value past $35 billion. Although the shares experienced a slight decline on Tuesday, trading at $57.23 at midday, they remain up by 36 percent since last week and a remarkable 379 percent for the year.
Symbotic currently holds a valuation of nearly $32 billion, making it the second-most valuable tech company in Massachusetts, just behind Analog Devices, and one of the top twelve companies in the state overall. In comparison, HubSpot and Akamai are valued at $27 billion and $14 billion, respectively.
Sales for Symbotic performed exceptionally well in the company’s recently completed fiscal third quarter, with a remarkable 78 percent jump to $312 million. Although the net loss increased from $33 million to $39 million compared to the previous year, when excluding certain expenses such as stock-based compensation, Symbotic only experienced a $3 million loss on a cash flow basis. The company anticipates erasing this loss in the next quarter.
Symbotic’s decision to partner with SoftBank on the GreenBox venture aligns with their ambitious growth strategy. Co-founder Rick Cohen refers to it as the Go Big, Go Fast approach. While Symbotic could have pursued the effort independently, the substantial capital provided by SoftBank, amounting to billions of dollars, was a crucial factor in the decision. Cohen expressed that with more capital during the early years of C&S, their previous business venture, it could have achieved even greater success.
The partnership with SoftBank through a joint venture enables Symbotic shareholders to benefit from the economic advantages generated by a fully automated warehouse-as-a-service entity while minimizing risks. Analyst Robert Mason from Robert W. Baird & Co expressed approval of this strategy, noting that it ensures a sharing of benefits while providing risk mitigation.
To address concerns about potential supply chain challenges affecting their growth, Symbotic opted to outsource the manufacturing of their robots this year. Cohen emphasized that redundancies were implemented in the outsourcing plan to prevent any potential slowdowns. The company remains highly vigilant about avoiding disruptions in their supply chains, especially after witnessing recent industry-wide challenges.
In conclusion, Symbotic’s collaboration with SoftBank on the GreenBox venture has resulted in significant stock value growth and increased sales. The company’s innovative approach to automated warehousing continues to attract attention and investment interest. With a promising outlook and a robust growth strategy, Symbotic aims to solidify its position as one of the leading tech companies in Massachusetts.
