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Symbotic Inc (SYM) Stock Price Soars 111% on Nasdaq IPO. Is It a Buy?

Simon Mugo trader
Updated 16 May 2023

Trade Symbotic Shares Your capital is at risk

Key points:

  • Symbotic Inc stock soared 111% on its Nasdaq debut via SPAC merger.
  • The warehouse automation raised $750 million from investors.
  • The company performed much better than other SPAC deals this year.

The Symbotic Inc (NASDAQ: SYM) stock price soared 111% on Wednesday after debuting on the Nasdaq exchange as investors clamoured to get a piece of the warehouse automation specialist company.

Also read: The Best Cheap Tech Stocks Under $10.

The company IPO’d at $10 and ended its first-day trading at $20.07. The company went public by merging with SVF investment Corp. 3 (SVFC), a Special Acquisition Company (SPAC). However, its rally was a welcome departure from the current trend where SPAC deals have fallen heavily after mergers.

The warehouse automation company is owned by Steven Cohen, the billionaire former CEO of C&S Wholesale Grocers, the largest wholesale grocery distributor in the United States, based on revenue of $25 billion in 2021.

Cohen retired from his role as CEO of C&S Wholesale to focus on building Symbotic; a startup solely focused on warehouse automation. Over the past few years, the company has fine-tuned its warehouse automation tools by testing them on C&S warehouses.

Symobotis’ average warehouse fleet is composed of 400 symbots set up in a modular warehouse that is fully automated and does not need any humans. The entire setup costs $50 million, which the firm claims its customers can recoup within the first year of operation through cost savings.

The company’s system is unique in that it does not need labels or trays since it is equipped with digitised individual cases whose size and handling capabilities are known by the system. Therefore, the system is much faster than many other robotic systems that require humans, labels and trays.

Some institutions that invested in Symbotic include Walmart, which owns 9% of the company after investing $150 million in the firm and handing its $174 million in cash. Symbotic will also benefit from the $320 million held in trust by SVFC and a $200 million forward purchase of common stock by an entity affiliated with Softbank’s Vision Fund 2.

Warehouse automation is a growing industry, with experts predicting that the industry has a total addressable market worth $250 billion. Those who missed out on yesterday’s rally may be better off buying today since the Symbotic was down 16% premarket.

The Symbotic Inc stock price soared 111% on its Nasdaq debut on Wednesday, June 8, 2022.

*This is not investment advice. Always do your due diligence before making investment decisions.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading