Why Symbotic Stock Tumbled This Week
Key Points
Symbotic is selling 6.5 million shares, along with 3.5 million shares offered by Softbank.
The company expects a deployment realignment due to its next-generation storage structure.
A lofty valuation may be the real problem.
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Shares of robotics company Symbotic (NASDAQ: SYM) were under pressure this week following the announcement of a share offering on Wednesday. This announcement came on the heels of the company's fourth-quarter report last week, which was mixed in relation to analysts' expectations. Symbotic stock was down 25.2% for the week as of Thursday at 12:50 P.M. ET, according to data provided by S&P Global Market Intelligence.
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Raising cash
Symbotic disclosed in an SEC filing on Wednesday that it will sell 6.5 million Class A shares as part of a share offering. An additional 3.5 million shares will be offered by an entity controlled by Softbank.
This share offering comes soon after Symbotic reported its fourth-quarter results. The company reported revenue of $618 million, up from $565 million in the prior year period, along with a net loss of $19 million. For the first quarter of fiscal 2026, Symbotic expects to produce revenue between $610 million and $630 million.
Symbotic had plenty of cash on hand at the end of the fourth quarter, with cash and cash equivalents totaling $1.24 billion. However, a near-doubling of deferred revenue, which produced considerable free cash flow during fiscal 2025, was responsible for a large influx of cash. That deferred revenue is likely related to the deal the company signed with Walmart earlier this year.
Buy the dip in Symbotic stock?
Symbotic may be selling stock to capitalize on its soaring stock price. Shares of Symbotic have gained around 160% this year, even after this week's plunge. At the current stock price, selling 6.5 million shares will raise more than $400 million in cash.
The cash raise could also be related to an expected revenue disruption during fiscal 2026. The company is rolling out its next-generation storage structure, and it expects a "realignment of deployment," according to CFO Izilda Martins.
Either way, the share sale appears to be a minor issue. Valuation could be part of the problem, given the company's market capitalization of nearly $40 billion. While the company's robotic warehouse technology is gaining traction, investors should tread carefully.
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Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Symbotic. The Motley Fool has a disclosure policy.
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