Did Warren Buffett Just Make $800 Million on the Snowflake IPO?
A few days before Snowflake's (NYSE: SNOW) highly anticipated initial public offering (IPO), a regulatory filing revealed that Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), the conglomerate led by billionaire investor Warren Buffett, had agreed to purchase $250 million of the company's stock at the IPO price. This was a very surprising move, as Berkshire has never invested in an IPO in the 55 years Buffett has been in charge, and Buffett himself hasn't purchased a new issue since Ford went public in 1956.
In addition to this amount, Berkshire simultaneously bought 4.04 million shares from an existing Snowflake investor. Based on the $120 IPO price, Berkshire owns a little more than 6.1 million shares of the cloud computing company, a stake equivalent to about 2.2% of the outstanding shares.
On IPO day, Snowflake's share price soared, reaching an intraday high of $319 and settling at just under $254, a gain of more than 111% on day one. Doing the math, Berkshire's 6.1 million shares increased by about $817 million on Snowflake's first day as a publicly traded company -- not a bad return in just a few hours.
Source Fool.com
