IPO that made Salesforce and Warren Buffett bullish

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There have been several landmark years in the history of corporate IPOs: 1986, 2004 and 2012. I believe that 2020 will be remembered as these key dates.

The Robin Hood of Omaha?

Did Warren Buffett suddenly become the Robin Hood of Omaha instead of the Oracle of Omaha? Unlikely! When you are 90 years old, you will not make stupid bets with your money. It could tarnish your reputation and your heritage. So why the world’s most famous investor, Warren Buffett, taking $ 570 million stake in a start-up? And why Salesforce invests an additional $ 250 million in a company you may never have heard of? Here’s why Warren Buffet, Marc Benioff and I are all optimistic about Snowflake.

Short history lesson
  • 12 mars 1986 – Oracle $ ORCL (IPO price: $ 0.067, today: $ 55.73)
  • 13 mars 1986 – Microsoft $ MSFT (IPO price: $ 0.089, today: $ 214.25)
  • June 23, 2004 – Salesforce $ CRM (IPO price: $ 3.95, today: $ 254.70)
  • June 29, 2012 – ServiceNow $ NOW (IPO price: $ 23.70, today: $ 487.41)

Will 2020 add another name to this list?

Replay Frank

Do you think Snowflake will be the smallest of all? I do not! Here’s why:

Snowflake to be one of the biggest tech IPOs in history
  1. Snowflake TAM is way bigger than any previous company Frank has gone public
  2. Snowflake disrupts the market dominated by Oracle, Microsoft, IBM, etc.
  3. Snowflake is designed for the multi-cloud world
  4. Snowflake is a primary acquisition target for almost all cloud providers
  5. Snowflake can grow as big as Oracle (if it is not stopped by the acquisition)
  6. Snowflake complements SaaS applications like Salesforce, ServiceNow… etc.
  7. Snowflake has a technological advantage that will be further expanded
  8. Snowflake has a favorable business model that protects it against vendor foreclosure
  9. Snowflake works with all major clouds: AWS, Azure, GCP, and Salesforce.
  10. Snowflake integrates with many data platforms Informatica, Tableau, Power BI, etc.

And that’s just the beginning.

What is the future of Snowflake?

There are only three most likely options:

  1. Snowflake is acquired by Salesforce, Oracle, Microsoft, Google, Amazon or IBM.
  2. Snowflake will become top flight like ServiceNow, DocuSign, Okta, Veeva… etc.
  3. Snowflake will overtake its competitors and become as acquisitive as Salesforce
Conclusion

In 1986, I couldn’t invest in Oracle and Microsoft IPOs; I was too young.

In 2004, I missed the Salesforce IPO because I had no investment experience.

In 2012, I didn’t invest in ServiceNow because I didn’t know how to rate businesses.

But in 2020, I won’t miss the Snowflake IPO.



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