Stock market blizzard: Snowflake set for £33bn IPO as valuation bubble keeps on expanding

Cloud data warehouse slinger Snowflake has set an IPO price valuing the company at $33bn, making it nominally worth more than US retailer Best Buy or UK supermarket chain Tesco.

The eyewatering valuation comes two months after the firm was said to be mulling a share offering that would have valued it at $20bn, in a confidential IPO filing.

But by Monday this week Snowflake had lifted its expected pricing range in an S1 filing to $100 to $110 per share. By yesterday it had filed an equity incentive plan that reflected a maximum offering price per share of $120. Today Snowflake confirmed it went with the high end of that range, saying 28 million shares of Class A common stock would be offered to the public at $120.00 a pop. Lucky old us.

Just 18 months ago the San Mateo-based company was valued at $1.5bn, according to an investment round.

Shares started trading on the New York Stock Exchange today under the ticker symbol SNOW, with the offering closing on 18 September 2020.

The frenzy of interest in Snowflake comes as the investment world is desperate for high-growth companies in a post-COVID-19 lockdown world. Investors seem to think data analytics will help organisations navigate the new landscape, making Snowflake a safe bet. The interest is such that legendary investor Warren Buffet, who hasn’t put money into an IPO since 1955, is said to be considering a flutter.

The focus of investors’ enthusiasm for the company is based on its growth in revenue, which increased 174 per cent from $96.7m in January 2019 to $264.7m in January 2020. Okta, which publishes an annual report on the growth of enterprise apps, said Snowflake was the fastest-growing application in 2019, at 273 per cent.

As the old adage goes, revenue is vanity,

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