Berkshire Hathaway will plow more than 70 570 million into cloud database company Snowflake, marking a rare venture in the enterprise technology market G by Warren Buffett after a failed bet on IBM.
The news came when Snowflake released an indicative price range for its upcoming initial public offering that kept the company’s value at .7 23.7bn. The higher valuation targets, compared to the sharp sell-off in tech stocks in the past week, point to the company’s high expectations, whose technology is designed to handle large amounts of data in the cloud computing era.
In an update to its IPO filing on Tuesday, Snowflake announced that Berkshire Hathaway and Salesforce Ventures would buy 250 250 million worth of shares directly from the company at the time of its listing. Mr Buffett’s company will also buy another block of shares worth more than 20 320 million from one of the company’s investors.
Mr. Buffett has long been known for avoiding investing in tech, an area he saw as weak in value rather than abrupt and impractical. He broke that habit with a big bet on IBM in 2011 when the U.S. The computer maker claimed that it had created a rock-solid financial model that would allow it to project five years of future earnings and avoid general volatility in the sector.
IBM then lost ground to cloud competitors and its share price was about 30 percent below its level when Berkshire first invested. Mr. Buffett sold and instead endorsed Apple Pal, more investing in leading consumer brand name companies that supported other industries.
Snowflake said it would raise the price of shares sold in its IPO from 75 75 to 85 85. That would add 24 to 3.24 billion, if the share price were topped at the top of the range and the overhaul provision was met, including Berkshire Hathaway and Salesforce’s m 500m.
