Snowflake gets listed

Snowflake gets listed

09 November 2020Reading time: 3 minutes

Snowflake went public mid-September. Its IPO was a success and the growth of the company seems to continue in 2020 despite the current crisis. Will Snowflake meet the investors’ expectations or will it disappoint in the long run?

A brief overview of cloud computing

What is mainly understood under cloud computing is the sharing of data storage capacities and computer power. Cloud computing is especially interesting if you have large data amounts to store and if you don’t have or don’t want to have the required IT infrastructure to store this data locally. It is also interesting if you need important and/or varying computing capacities: cloud computing providers will offer you the required flexibility and the computing power. Thanks to cloud computing, companies can reduce their IT costs. Indeed, the companies then only pay for the storage capacities and computing power they are using and they don’t need to have an important IT-infrastructure anymore.  
The idea of sharing data storage capacities and computing power was already present in the 1960s, but the development of cloud computing as we know it today really started in the 1990s and 2000s. Its development was strongly linked to the increase in data storage capacities and the development of faster processors. It is in the 2000s that some major US companies started their cloud computing services. Amazon launched its service in 2006, Google in 2008 and Microsoft in 2010.   

Snowflake is now a listed company

The 2012-founded Californian company rapidly became one of the major cloud computing services providers. The company does not only provide data storage capacities and computing power, but also data analysis tools. Snowflake was able to rapidly increase their clientele and currently has more than 3000 clients worldwide, including some of the largest US companies according to Forbes.
By increasing its clientele, the company also significantly increased its revenue over the years. For example, in 2018 it had a revenue of USD 96.7 million and in 2019 a revenue of USD 264.7 million. Many analysts are expecting its revenue to further increase in 2020, despite the current crisis.
In order to finance its growth strategy, the company increased its capital several times. For example, it raised USD 450 million in October 2018 and USD 479 million in February 2020. The last and logical step for the company was to become a public company. With its IPO mid-September 2020, Snowflake was able to raise USD 3.4 billion, making it one of the largest IPOs of 2020.

Overview of the stock price

Since the company was not listed before September 2020, we can only provide figures since the IPO. The initial IPO price was set at USD 120, but after the first trading day, the stock closed at USD 253.93. On October 30th 2020, the stock closed at USD 250.02.
The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

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This information does not constitute a financial analysis, but product advertisement. Thus it does not meet the legal requirements to ensure the impartiality of financial analysis and is not subject to trade prohibition before the publication of a financial analysis.
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28/11/2020 03:57:03