Symbotic Stock: Sleeping With a Giant

Spending time in the corporate world helps investors understand more intuitively how businesses operate. Performance improvement plans are large collections of documentation used to exit people. Promotions are rarely predictable. And when two businesses interact, one is always the alpha. Vendors who provide services to large companies are always on the lowest rungs of the dominance hierarchy. That’s because they have almost no leverage at the negotiating table. If a vendor provides a critical function, there will usually be a second vendor in the shadows who can easily provide a substitute if necessary. So, when a vendor counts on a single customer for more than half their revenues, it’s a big risk, especially when the customer is Walmart (WMT).

About Symbotic

An introduction to what Symbotic (SYM) does can be found in our piece on Symbotic Stock: A Pure Play on Warehouse Automation. Understanding the roots of this company will help explain why the Symbotic S-1 filing document contains 139 mentions of C&S Wholesale Grocers. Founder, Chairman, and CEO of Symbotic, Rick Cohen, also happens to be the sole owner of C&S Wholesale Grocers, the largest wholesale grocery distributor in the United States. After turning a third-generation regional grocery distributor into the eighth most valuable private company in America, he began devel

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