Snowflake: Salesforce And Berkshire Hathaway To Invest $250 Million Each At The Time Of IPO

By Amit Chowdhry ● September 12, 2020
  • Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) and Salesforce.com, Inc. (NYSE: CRM) are going to be investing $250 million each or more in the Snowflake stock as the company goes public

Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) and Salesforce.com, Inc. (NYSE: CRM) are going to be investing $250 million each or more in the Snowflake stock as the company goes public. These details were revealed in an amended filing published earlier this week. The filing states that Berkshire and Salesforce are expected to buy 3.125 million shares at $80 per share.

Snowflake is known as one of the most highly anticipated IPOs this year as the company makes it easier for managing data in the cloud. And Snowflake’s services have been high in demand as many companies have been relying more on cloud computing services while millions of employees are being forced to shelter-in-place due to the COVID-19 pandemic.

Snowflake an initial price range of its shares at $75 to $85. This would value the company at somewhere between nearly $21 billion to nearly $24 billion. Based on the midpoint range, it values the investment from Salesforce and Berkshire at $250 million.

Berkshire Hathaway will also buy 4 million Class A shares from former Snowflake CEO Bob Muglia in a secondary transaction, which was set at the IPO price for each share. This is expected to cost between $303 million to $344 million based on the expected price range. This means that Berkshire Hathaway’s total investment in Snowflake shares could be valued at up to $590 million in total.

Prior to going public, Snowflake was privately valued at $12.4 billion. That round of funding included participated by Salesforce’s venture capital arm Salesforce Ventures. Salesforce’s further investment in Snowflake also lays the foundation for a stronger relationship between both companies.

Snowflake had filed a draft S-1 for listing two classes of common stock in NYSE under the symbol “SNOW.” The Class A stock would be entitled to one vote per share and Class B will be entitled to ten votes per share and can be converted into Class A.