Warren Buffett and Salesforce to invest in Snowflake’s IPO


Cloud data management company Snowflake revealed in a regulatory filing today Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) And salesforce.com (NYSE: CRM) Each company can invest $ 250 million in the company using concurrent private placements in conjunction with its initial public offering (IPO).

In an amended S-1 filed with the Securities and Exchange Commission today, Snowflake also said it would offer 28 million shares in the range of $ 75 to $ 85 per share, more than $ 2.7 billion for start-ups Will raise the amount of This cloud-parent company would be valued between $ 21 billion and approximately $ 24 billion.

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The move was somewhat surprising to Buffett, given the Oracle of Omaha’s track record of avoiding technology issues. This has changed as Ted Weschler and Todd Combs, Buffett’s two money managers have moved up in tech stocks in recent years, Apple (NASDAQ: AAPL) And Adventuress (NASDAQ: AMZN), among others. Assuming the limit’s $ 80-per-share midpoint, the move would net Buffett 3.125 million shares of the company.

They are not everything. Berkshire has also agreed to purchase an additional 4,042,043 shares from current shareholders in a private, secondary transaction that pays an amount equal to the IPO price. This suggests that Buffett’s investment totals may exceed $ 500 million.

This move by Salesforce did not come as a surprise as the company paid a patent for investing in early stage tech companies. Over the past several years, Tech Bigwig has invested Twilio (NYSE: TWLO), Dropbox (NASDAQ: DBX), And DocuSign (NASDAQ: DOCUMENT), just to name a few.

Snowflake has recently generated stratospheric revenue growth that seems to attract investors. Revenue for the fiscal year ended January 31, 2020 increased by 173%. The frantic pace of growth continued in the first half of this year, when revenue grew by 133%.