Snowflake Inc. has had a hot start to the busiest week for IPOs in over a year.
estimated its IPO at $ 120 a share on Tuesday night, which means it will raise at least $ 3.86 billion from the IPO and probably over $ 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 purchase shares for $ 250 million at the IPO price. The underwriters, led by Goldman Sachs and Morgan Stanley, have access to an additional 4.2 million shares, which could increase the total equity raised to about $ 4.4 billion.
Based on the price increases during the IPO, there is demand for these additional shares. After originally applied for an IPO less than a month ago, Snowflake announced an expected price range of $ 75 to $ 85 promotion last week. On Monday, the San Mateo, California software company dramatically increased this range to $ 100-110 per share, then on Tuesday evening the price was above this target. Renaissance Capital announced this week that it will be the largest software IPO ever based on a higher price range.
See also: Five things to know about Snowflake IPO
Snowflake makes database software that runs in the cloud, offering the necessary piece of technology infrastructure in new ways. The proposal drew enough enthusiasm to attract investment from Berkshire, whose legendary CEO Warren Buffett has been known to shy away from young tech companies and IPOs for decades. In addition to the $ 250 million investment, Berkshire is buying over 4 million shares at an IPO price from former Snowflake CEO Robert Muglia.
At the IPO price, Snowflake is initially valued at $ 33.3 billion just eight years after registration. The shares are expected to start trading on Wednesday morning on the New York Stock Exchange.
Snowflake is one of a dozen companies expected to go public this week, making it the busiest week for an IPO since Uber Technologies Inc. UBER,
according to Renaissance, in May 2019. JFrog Ltd. FROG, m.
Another software company was also scheduled to announce the price of its IPO on Tuesday.
Two other software companies, Unity Software Inc. U,
and Sumo Logic SUMO,
the IPO is expected to be priced later this week. Other offerings among the expected dozen include packaging company Pactiv Evergreen PTVE.
and telemedicine company American Well Corp. AMWL,
known as AmWell.