Nave Slootman, CEO, Snowflake
Source: CNBC
Snowflake received a vote of confidence Tuesday after a filing revealed that Berkshire Hathaway and Salesforce each consented to purchase $250 million of stock at the IPO price in a concurrent private placement.
Berkshire Hathaway agreed to buy an additional 4.04 million shares from one of Snowflake’s prevalent stockholders in a secondary transaction. The company said that the midpoint of its pricing range for the IPO is expected to be $80 per share, which disposition value Berkshire Hathaway’s stake at more than $550 million at the time it goes public.
At that assess, Snowflake would have a market cap of $22.3 billion, based on the latest shares outstanding count in the prospectus, smear an almost $10 billion increase since February, when Salesforce led a financing round at a $12.4 billion valuation.
The Salesforce turn is not particularly surprising, as the company has invested in numerous cloud software companies in recent years, including Zoom, Twilio and Dropbox. It many times sells these shares after they go public.
But the Berkshire Hathaway investment is atypical for the company, Warren Buffett has enlarged a reputation as a value investor who has made high-profile bets on conglomerates. However, he does not make all the investing decisions himself and destitutes on lieutenants such as Todd Combs and Ted Weschler, especially when it comes to tech stocks. Buffett said conclusive year that “one of the fellows in the office” was responsible for Berkshire’s stake in Amazon, likely referring to Combs or Weschler.
Snowflake, which entrusts businesses new ways to store and access data, is expected to begin trading this year under the ticker figure “SNOW.” The company said in a prospectus last month that revenue in the first half of 2020 more than doubled to $242 million from $104 million a year earlier.
The company ranked No. 40 on this year’s CNBC Disruptor 50 cant.
— CNBC’s Jesse Pound contributed to this report.
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