Warren Buffett’s Berkshire Hathaway Earns US$800 Million On Snowflake IPO

Warren Buffett has done it again.

The 90-year-old investor who champions a "buy-and-hold" investing strategy made a quick $800 million U.S. on the initial public offering (IPO) of cloud computing company Snowflake (NYSE:SNOW). Buffett’s holding company, Berkshire Hathaway (NYSE:BRK.A), bought $250 million U.S. worth of Snowflake stock at the IPO price and an additional four million shares from another stockholder at the debut price.

Shares of Snowflake surged 111% to about $253.93 U.S. in its market debut, pushing Berkshire Hathaway’s stake to $1.55 billion U.S. from around $730 million U.S. based on the IPO pricing of $120 U.S. per share. That’s an $800-million U.S. paper profit in one day.

The Snowflake investment was out of character for Buffett who has been critical of buying companies at their market debuts. The legendary value investor hasn’t invested in a newly public U.S. company since the Ford Motor Co. (NYSE:F) IPO back in 1956.

It’s widely speculated that Buffett lieutenants Todd Combs and Ted Weschler orchestrated the Snowflake share purchase. The longtime value investor only changed his aversion to technology stocks in recent years under the influence of his lieutenants. Berkshire’s massive Apple (NASDAQ:AAPL) stake — now accounting for 40% of its equity portfolio — helped the conglomerate weather the COVID-19 market downturn earlier this year.