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Berkshire Hathaway Is Set to Invest More Than $550 Million Into the Cloud-Data Company Snowflake When It Goes Public

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Key Points

  • Berkshire Hathaway has agreed to invest $250 million in Snowflake when it goes public in the coming weeks, according to the updated S-1 filing by the cloud data firm.
  • The popular investor’s conglomerate will buy around 3.1 million Class A shares in a private placement, based on the estimated IPO price range of $75 to $85 from Snowflake’s $80 midpoint.
  • If both transactions go through, Berkshire will invest more than $550 million on more than 7 million shares, accounting for around 19 percent of the 38.3 million Class A shares that Snowflake expects to be outstanding following its bid.
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Berkshire Hathaway has agreed to invest $250 million in Snowflake when it goes public in the coming weeks, according to the updated S-1 filing by the cloud data firm.

The popular investor’s conglomerate will buy around 3.1 million Class A shares in a private placement, based on the estimated IPO price range of $75 to $85 from Snowflake’s $80 midpoint.

Buffett’s company has also decided in a secondary transaction to buy another 4 million Class A shares from former Snowflake CEO Robert Muglia, paying the IPO price for each share. Based on the expected price range, that could cost around $303 million to $344 million.

If both transactions go through, Berkshire will invest more than $550 million on more than 7 million shares, accounting for around 19 percent of the 38.3 million Class A shares that Snowflake expects to be outstanding following its bid.

Salesforce has also agreed to buy $250 million of Snowflake stock through Salesforce Ventures, its strategic investment arm, the filing reveals.

The new bet from Berkshire is surprising as Buffett is notoriously avoiding tech stocks, choosing to invest in the companies he knows. It follows a flurry of unexpected transactions from his company including his first investment in a gold miner and deep cuts to his last quarter holdings in JPMorgan, Wells Fargo, and other financial firms.

Buffett’s company also reported 5 percent stakes last week in the five main Japanese trading firms, or “sogo shosha,” and acquired $2.1 billion of Bank of America stock over 12 consecutive trading days to August 4.

Snowflake was founded in 2012, and in February was privately valued at $12.4 billion. Its revenues rose to $133 million year-on-year by 121 percent in the three months to July 31, helping to reduce its operating loss by 19 percent to $78 million.

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