Snowflake Inc. (NYSE: SNOW) entered the market with a bang on Wednesday. Shares began trading at just over $260, after pricing at $120 for its 28 million shares. That is well above the expected price range of $100 to $110. However, this is only the opening trade. There seems to be much more hype around the stock among investors and analysts.
The underwriters for the offering are Goldman Sachs, Morgan Stanley, JPMorgan, Allen, Citigroup, Credit Suisse, Barclays, Deutsche Bank, Mizuho Securities, Truist Securities, BTIG, Canaccord Genuity, Capital One Securities, Cowen, D.A. Davidson, JMP Securities, Oppenheimer, Piper Sandler, Stifel, Academy, Loop Capital Markets, Ramiriez and Sieber Williams Shank.
Snowflake operates as a data warehousing cloud service provider and was founded in 2012. The company has enjoyed continued growth over the past year. Revenues were up 174%, employee count doubled to 1,400 and Snowflake quadrupled the number of new customers, bringing its total to about 2,400 at the end of 2019.
Some had previously suggested that this company’s valuation could reach over $20 billion by the time it went public. In this case, the valuation looks like it’s actually closer to $50 billion.
In the past, this company won the business of credit card giant Capital One. Despite major players like Amazon and Microsoft in the field, Capital One chose Snowflake, and so far the partnership appears to be working out. Snowflake has attracted some other big names as well, and CEO Frank Slootman says the company is taking more business from the major players in the cloud.
The firm said that it intends to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures.
Snowflake stock traded up over 55% from its original pricing to $310.00, in a range of $240.00 to $319.00 on the day thus far. As of 12:45 p.m. Eastern, over 6 million shares had moved.
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