Snowflake Inc. (NYSE:SNOW) Initial Public Offering was a big success as its shares more than doubled after rallying 111% on the first day of trading on the New York Exchange. After pricing the stock at $120 a share, the stock began trading at $245, ending the day at highs of $253.93.
Snowflake IPO Record
The cloud company raised more than $3 billion based on its opening price on selling 28 million shares. The impressive debut accords Snowflake, the title of the largest IPO ever. The IPO easily topped the VMware, Inc. (NYSE: VMW) IPO that ended up raising $1 billion in 2007.
The 111% rally came at the backdrop of major U.S stock indices edging lower as the correction in the stock market continued to gather pace. Tech stocks have come under pressure in recent days, with most of them pulling from record highs and struggling to bounce back.
Amid the correction, Snowflake continues to elicit strong demand as investors remain bullish about the company’s prospects in the burgeoning cloud computing segment. The company was forced to hike its IPO share price from $75 a share to $120 a share, affirming the strong demand in the market. The Surge to a valuation of $253 a share saw the company’s market cap surge to $70.4 billion compared to $12.4 billion in February before COVID-19 came calling.
Snowflake blockbuster opening in the market does not come as a surprise. The Company’s core business has been growing at an impressive rate. Annualized revenue grew by more than 130% in the first half of the year to over $500 million.
In addition, it has received a vote of confidence from a number of institutional investors. Berkshire Hathaway Inc. (NYSE: BRK.A) and salesforce.com, inc. (NYSE: CRM) have already taken stakes in the cloud computing firm with the purchase of $250 million worth of stock.
The vote of confidence comes on the company growing to become a major provider of cloud offerings. The company offers cloud computing solutions that allow clients to analyze and share vast amounts of data.