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Business Finance Technology

Ain’t a Snowflake

A snowflake is a political insult for someone who is perceived as too sensitive. This post is not about that.

Snowflake, the Bay Area company could become the largest software IPO of all time. It starts trading tomorrow.

It was initially priced between $75-$85, upped to $100-$110 and again upped to $120. At that price, it would be valued ~ $40B. Some banks are going to make a killing.

I started hearing about Snowflake a few years ago when a few data oriented startup companies mentioned them often. They were compared with Looker. Looker was acquired by Google in 2019 for $2.6B.

The other interesting tidbit was that Bob Muglia, an ex Microsoft veteran who last ran Server and Tools served as CEO for this company for three years until he was ousted in March 2019. His ouster apparently came a week after he said that Snowflake didn’t have to IPO soon as it had a ton of cash at hand. The guy who founded ServiceNow is now the CEO. Talk of the Hot Hand. On that note, the new book Hot Hand by Ben Cohen is a good read.

They had revenue of $265M last year, a 173% growth. NRR was 158%. It makes sense that NRR is that high. Being a complex data integration project, it’s hard for a customer to switch to another platform quickly.

Snowflake’s data cloud platform breaks down data silos, enabling customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data, delivered through a customer-centric, consumption-based business model, only charging customers for the resources they use. Snowflake allows companies to use/access data across the big three public cloud computing vendors AWS, Azure and Google Cloud. Snowflake is a customer and competitor to the large public cloud vendors, but their respective offerings don’t offer the agnostic cross platform capability, so its independence is a key differentiator.

Berkshire and Salesforce are each buying $250M in the offering. Convincing Berkshire to buy in the offering is indeed a coup.

If it opens at $200 / share, that would be like 100x sales.

If you are one of the lucky ones to get an allocation, hold onto it. Chasing this one is likely to take a strong gut.

Let it Snow! Let it Snow!

While Main Street is hobbling, tech IPOs and Wall Street are humming. The tale of two Americas.

Categories
Finance Politics Wall Street

Corona Virus | Crash of 2020 | Liz Warren

The corona virus (COVID-19) is front page news across the world. Originating in Wuhan, it has now caused quite a havoc in the globe. Thousands of folks in Wuhan province are dead and less than a hundred rest of the planet.

China seems to have effectively shut down and has undertaken extreme quarantine in Hubei province. That has caused a disruption in the global supply chain.It took a while for big companies and Wall Street to realize it. Eventually on Feb 23/24 the market adopted a risk on mode and sold off substantially. But some folks had been warning that the bull market since 2009 was getting too ahead of itself and asked people to raise more cash. I did a little bit of that, but not enough as I think about it on the evening of Feb 25 2020.

Last Saturday, my wife and I attended a rally for Elizabeth Warren. Her debate performance impressed us a great deal and we decided to check her out in person. There was a huge crowd at the Seattle Armory. It was a nice feeling to stand in line with a diverse, peace loving, polite crowd. The “Dream Big, Fight Hard” chants drowned out a guy, who persisted in reading from some religious text, the origins of which I was not curious about. We had to settle for the overflow room and a big screen to watch and hear her. Elizabeth Warren is very articulate, knowledgeable, and a gracious person. As I write this, I am not sure if she will make the nomination, but hope we shall. In a few hours, there will be another debate from South Carolina. Let’s hope her fortunes continue to improve.

Trump visited India this week. I’m really appalled by the over the top red carpet treatment that Modi threw for him. It was big let down.

Meanwhile, Cheers on Netflix keeps us going to bed smiling.