Symbotic Inc. (SYM) shares saw a notable decrease in value during after-hours trading on Wednesday, stemming from the company's disclosure of an upcoming public offering of common stock. This move involves both new shares issued by Symbotic itself and existing shares being sold by an affiliate of SoftBank, raising questions among investors regarding its potential impact on the stock's future.
The robotics technology firm, Symbotic, has initiated an underwritten public offering of 10 million common shares. This total comprises 6.5 million shares directly from Symbotic as part of a primary offering, while an additional 3.5 million shares are being divested by SVF Sponsor III, an entity linked to SoftBank, in a secondary offering. This dual approach to raising capital and offloading existing stakes often leads to market reactions, especially concerning the dilution of existing shares.
Further details from Symbotic indicate that the underwriters involved in this offering will be granted a 30-day option to acquire up to an additional 1.5 million shares at the predetermined public offering price. The proceeds generated from Symbotic's primary share sale are earmarked for general corporate purposes, which could include funding ongoing operations, research and development, or other strategic initiatives. Conversely, all funds from the 3.5 million share secondary offering will go directly to the selling stockholder, SoftBank's affiliate, rather than to Symbotic itself.
As of its last earnings report at the close of November, covering the period up to September 27, Symbotic reported a robust financial position with approximately $1.25 billion in cash and cash equivalents. Despite this healthy cash reserve, the decision to proceed with a new share offering appears to have triggered a cautious response from the market. At the time of this report's publication, Symbotic shares had fallen by 11.84% in after-hours trading, settling at $64.55.
The recent announcement by Symbotic regarding its common stock offering has led to a significant downturn in its share price. This offering, combining both primary and secondary sales, reflects strategic financial adjustments by the company and its major investor, SoftBank, prompting a reevaluation of the stock's valuation by market participants.