Warren Buffett-backed Snowflake's value doubles in stock market's largest software debut

Andrew Cummings
September 18, 2020

When the official trading day ended, the price was $ 254, according to United States media The Wall Street Journal.

Snowflake sold 28 million shares in its IPO to raise 3.36 billion US dollars in the biggest software IPO of all time. That price range was revised upward from the original expectation of $75 to $85 a share earlier this month. Meanwhile, the Renaissance IPO ETF is slipping 0.1% in morning trading, while the S&P 500 is edging up 0.2%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move.

Visit Business Insider's homepage for more stories. The company's product is a cloud-based data storage and analysis service.

Snowflake, one of the most hotly anticipated tech offerings of the year among software and cloud-data investors, epitomizes the hunger among investors for the growth that IPOs tend to promise. As of Wednesday, Uber's shares were resting below $40 a piece. CEO Frank Slottman also has a stake in the company.

Analyst Charles King of Pund-IT Inc. told SiliconANGLE that Snowflake was getting so much attention because it's one of the few startups around that qualifies as what you might call "cloud computing for adults".

Like many growth companies in the current environment, Snowflake is not making a profit, but the company has grown rapidly.

Sales for the 12-month period ending 31 January were $264.7m, up 174 per cent on the previous year.

Snowflake, which has been backed by Warren Buffett-led Berkshire Hathway Inc and venture capital firm Salesforce Ventures LLC, sold 28 million shares in its IPO priced at $120 per share, well above the range of $100 to $110 apiece.

"Snowflake's IPO is a definite win for our industry and for the businesses Snowflake serves as well as the enterprises we serve-all of which are desperate for new data and analytics approaches". Berkshire tends to invest more in mature companies like Apple, which is now the top holding for the "Oracle of Omaha". By contrast, Workday's revenue hit $1.8 billion, up 24%, in the first half of 2020, as it lost $186 million.

In the second quarter of 2021 ending July 31, 2020, Snowflake's loss narrowed to $77.6 million from $93.4 million a year ago.

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