- Warren Buffett’s Berkshire Hathaway confirmed the size of its Snowflake stake in a regulatory filing on Monday.
- The billionaire investor’s company owns about 5.1 million Class A shares, or 2.2%, of the cloud-data platform’s outstanding stock.
- Berkshire has notched a $US800 million gain, as it spent $US735 million on shares worth more than $US1.5 billion as of Monday’s close.
- The unusual bet shows that Buffett’s company is “evolving and becoming a much more tech-aware, tech-centric, tech-focused conglomerate,” Snowflake CEO Frank Slootman told Yahoo Finance.
- Visit Business Insider’s homepage for more stories.
Warren Buffett’s Berkshire Hathaway officially disclosed its stake in Snowflake on Monday, confirming it has scored a $US800 million gain on its investment in the cloud-data platform.
The famed investor’s conglomerate owns about 6.1 million Class A shares, it said in a regulatory filing. The holding represents about 2.2% of Snowflake’s total outstanding shares, which include 40.4 million Class A shares and roughly 240 million Class B shares.
Berkshire spent $US250 million to buy about 2.1 million shares in a private placement when Snowflake went public earlier this month. It bought another 4 million shares at the IPO price of $US120 from former Snowflake CEO Robert Muglia in a secondary transaction, costing it $US485 million.
The upshot is Berkshire splurged $US735 million on Snowflake shares that have more than doubled in value to $US1.5 billion, based on Snowflake’s closing share price of $US250 on Monday. As a result, it has notched a $US800 million gain.
More Snowflakes might drop
Berkshire’s Snowflake bet surprised many investors as Buffett has historically eschewed loss-making, aggressively valued technology companies and IPOs in favour of safer, cheaper wagers.
The unusual deal stemmed from Berkshire’s insurance unit being a Snowflake customer, CEO Frank Slootman told Yahoo Finance. It appears that Todd Combs, the CEO of Geico and one of Buffett’s two portfolio managers, was impressed by the company and expressed interest in becoming an investor. That explains why his signature appears in Snowflake’s IPO filing.
Berkshire’s Snowflake investment may look like an anomaly, but Slootman argued it was a product of structural change. Buffett’s company is “evolving and becoming a much more tech-aware, tech-centric, tech-focused conglomerate,” he said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.