Snowflake Inc. set a hot start to the busiest week for initial public offering in more than a year.
It priced its IPO at $ 120 per share on Tuesday night, which means it will raise at least $ 3.86 billion in supply and possibly more than $ 4 billion. The company will sell 28 million shares to raise $ 3.36 billion and Berkshire Hathaway Inc. BRK.A,
and Salesforce.com Inc. CRM,
agreed to simultaneously buy $ 250 million worth of IPO shares. Underwriters, led by Goldman Sachs and Morgan Stanley, have access to an additional 4.2 million shares that could increase the total amount raised to about $ 4.4 billion.
Judging by the price increase throughout the IPO process, there is a demand for these additional shares. After originally applied for an IPO less than a month ago, Snowflake stated an expected price range of $ 75 to $ 85 a stock last week. On Monday, software company San Mateo of California dramatically increased this range from $ 100 to $ 110 per share, then its price was higher than this target on Tuesday night. Renaissance Capital said this week that it would be the largest IPO of software recorded on the increased price range.
Snowflake produces database software used in the cloud, providing an essential piece of technology infrastructure in a new way. The offer has generated enough enthusiasm to attract investment from Berkshire, whose legendary CEO Warren Buffett has famously avoided new corporate and IPO technologies for decades. In addition to the $ 250 million investment, Berkshire is buying more than 4 million IPO shares from former Snowflake CEO Robert Muglia.
At IPO, Snowflake was initially valued at $ 33.3 billion just eight years after its incorporation. The shares are expected to start trading on Wednesday morning on the New York Stock Exchange.
Snowflake is one of twelve companies expected to be released this week, making it the busiest week for IPO activity by Uber Technologies Inc. UBER,
was released in May 2019, according to Renaissance. JFrog Ltd. FROG,
Another software company is also expected to price its IPO on Tuesday.
Two other software companies, Unity Software Inc. U,
and Sumo Logic SUMO,
are expected to price IPO later this week. Other offers among the 12 expected include the packaging company Pactiv Evergreen PTVE,
and telemedicine company American Well Corp. AMWL,
known as AmWell.