Rick Cohen, founder of Symbotic (NASDAQ:SYM), has seen $9 billion erased from his net worth following a significant drop in his AI-powered company's stock price.
What Happened: Cohen, who owns and chairs C&S Wholesale Grocers, founded Symbotic which manufactures AI-driven warehouse robots. Symbotic went public in mid-2022 via a special-purpose acquisition vehicle and has been backed by Masayoshi Son's SoftBank Group Corp. (OTC:SFTBY) and American retail Walmart Inc. (NYSE:WMT).
Cohen's net worth was $21.4 billion at the start of January, placing him 94th on the Bloomberg Billionaires Index. However, his wealth has plummeted by 41% to $12.6 billion this year, dropping him to 178th place, Business Insider reported on Tuesday.
Symbotic's stock, which surged over 325% last year, has fallen more than 60% in 2024. According to Benzinga Pro, the stock closed at $19.20 on Monday. The company's value has now decreased to under $10 billion.
The decline is attributed to construction delays and increased implementation costs, which have squeezed profit margins. Symbotic also faces a class-action lawsuit alleging it misled the market about its growth prospects.
Why It Matters: The dramatic decline in Symbotic's stock price comes on the heels of its third-quarter financial results. Symbotic's shares plummeted in after-hours trading following the release of these results. The company reported increased costs and delays in its projects, which have significantly impacted its profitability.
These financial troubles have not only affected the company's stock but have also led to a substantial decrease in the net worth of its founder. A class-action lawsuit, filed today, further compounds the company's woes, alleging that Symbotic misled investors about its growth potential.
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari