Warren Buffett-backed Snowflake’s shares more than doubled in value in a volatile debut on the New York Stock Exchange on Wednesday, after the cloud-based data warehouse company raised $3.36 billion in the largest US listing so far in 2020.
Shares of the San Francisco-based company opened at $245 apiece, but the trading was briefly halted. As it resumed, the shares surged as much as 166 percent to hit a session-high of $319. The company’s initial public offering price was $120, which was well above the offer range of $100 to $110. It had on Tuesday raised $3.36 billion selling 28 million shares in the biggest software IPO of all time.
An opening pop of this magnitude is rare for a big IPO.
Experts said the scope to price the IPO higher was limited for investment bankers as Buffett-led Berkshire Hathaway and venture capital firm Salesforce Ventures bought $250 million worth of shares at $105 apiece earlier this month.
The debut marks a big win for Buffett, who rarely invests in IPOs and whose Berkshire Hathaway made over $1 billion on Snowflake’s listing.
“The fact that Salesforce and Berkshire Hathaway were both in the offering on a private placement added even more, fuel to the fire,” said Jeff Zell, senior research analyst and partner at IPO tracking firm IPO Boutique.
“The IPO was well endorsed by Buffett and he rarely subscribes to an IPO.” Snowflake posted a 173.7 percent jump in revenue to $264.7 million for the fiscal year ended January compared with a year earlier.
The blockbuster opening comes in the middle of a massive boom in US capital markets following a rebound in demand for new listings, after the COVID-19 pandemic forced many companies to put off their plans to go public earlier this year.
Prior to Snowflake, Royalty Pharma and Warner Music Group had the biggest stock market debuts this year.
Goldman Sachs, Morgan Stanley, JP Morgan, Allen & Co and Citigroup were the lead underwriters for the IPO.
World Economic Forum scraps 2021 Davos conference amid COVID-19
The World Economic Forum has canceled next year’s conference in Davos, Switzerland amid the coronavirus pandemic — but the annual event may take place elsewhere, according to reports.
The international business group recently told the town’s hotels in a letter that it would not hold its 2021 conference there, Swiss media reported Tuesday.
“As things stand today, the WEF 2021 in Davos will unfortunately be completely canceled,” Davos tourism official Reto Branschi told the Südostschweiz newspaper.
The revelation followed the Geneva-based WEF’s late August move to postpone the meeting — which attracts corporate and government leaders from around the world — from January to early summer because of COVID-19 concerns.
The organization is now looking for a different location in Switzerland to host the conference, according to Südostschweiz, which reported that most of the Alpine resort town’s hotels would be closed during the late spring and early summer months.
“We were somewhat surprised by this letter,” Tamara Henderson, president of Hotel Gastro Davos, a local hotel industry group, told Switzerland’s Keystone-ATS News Agency. “We feel left out and we want more clarity in the future.”
The World Economic Forum did not immediately respond to a request for comment Tuesday morning. The group said last month that it would share details about its postponed 2021 conference as soon as it could “guarantee the health and safety of our participants and the hosting community.”
“The decision was not taken easily, since the need for global leaders to come together to design a common recovery path and shape the ‘Great Reset’ in the post-COVID-19 era is so urgent,” the group said in a statement. “However, the advice from experts is that the forum cannot do so safely in January.”
Elon Musk says Tesla battery tech two years from mass production
The advanced car battery technology Tesla is expected to unveil this week won’t be widely available for another two years, CEO Elon Musk says.
The Silicon Valley automaker is set to reveal its latest innovations at Tuesday’s “Battery Day” event, but Musk said they “will not reach serious high-volume production until 2022.”
“The extreme difficulty of scaling production of new technology is not well understood,” the billionaire tech tycoon tweeted Monday. “It’s 1000% to 10,000% harder than making a few prototypes. The machine that makes the machine is vastly harder than the machine itself.”
Musk said Tuesday’s announcements would affect long-term production for Tesla’s Cybertruck and Roadster models as well as the electric semi truck the company unveiled nearly three years ago.
The highly anticipated event is expected to include details of Tesla’s plans to produce its own battery cells along with the possible rollout of a “million mile” battery that can go roughly twice as far as the company’s current technology.
But Musk indicated Tesla plans to buy more battery cells from partner companies including Panasonic, LG and CATL while it beefs up its own technology. Even with those increased purchases, Tesla expects “significant” battery shortages in 2022 and beyond “unless we also take action ourselves,” he tweeted.
Tesla shares tumbled 5.1 percent in premarket trading to $426.45 as of 7:57 a.m. ahead of Tuesday’s event, which Musk has said will be “very insane.”
With Post wires
NYC’s restaurants fear 25% indoor cap means ‘Armageddon’
Big Apple restaurateurs fought tooth and nail for indoor dining, and now that they’ve got their wish — sort of — they’re not so sure it’s going to help them survive.
Starting on Sept. 30, New York City eateries, from cafes to buffets, will be permitted to start serving food indoors again after a six-month ban. But industry insiders say the 25 percent cap on patrons instituted to protect people from the coronavirus isn’t enough for owners to pay their workers without government aid, especially when the city’s expanded outdoor-dining program ends next month.
“If outdoor dining ends and we are only able to offer indoor dining at 25 percent, we will end up going out of business. This is Armageddon for the restaurant industry,” said Nahid Ahmed, co-owner of Luthun, a small, tasting-menu-only restaurant in the East Village.
“We cannot get through the winter with only 25 percent unless there is some sort of government assistance.”
These are not the cries of Chicken Little, said restaurant consultant Don Evans, who broke the crisis down by the numbers.
High-end restaurants, he said, spend most of their money on payroll, around 33 percent. Food and beverage takes another 33 percent. The rest of the expenses might include 10 percent on rent; 10 percent on insurance and utilities; and 14 percent on “other” expenses, including linens, garbage, sanitation and paying outside apps like OpenTable.
“Some of the costs can be controlled, but not all, like insurance, ConEd and garbage pick up,” Evans explained. “If you’re only operating at 25 percent capacity, then your payroll costs shoot up by at least 50 to 60 percent. You are losing money no matter what. If you have to bring in your chef for $120,000, your manager at $80,000 and two sous chefs at $60,000 each, the numbers just don’t work. They don’t even come close.”
Restaurants with massive indoor spaces are expected to manage the costs better, such as The Milling Room on the Upper West Side, which has 225 seats inside and plans to open at 25 percent capacity.
“We’re also doing around 60 covers a night outside, which has been quite successful,” said Evans, who consults for The Milling Room. “The question, however, is what happens when it gets too cold for people to sit outside?”
Indeed, most restaurateurs say they will open for indoor dining at the end of the month only if they already have outdoor dining, which together with forgivable loans from the feds has helped them sustain operations thus far. Restaurants without outdoor dining — or located in once-bustling commerce and tourist centers, like Times Square — will remain closed.
Italian eatery Carmine’s, for example, will add indoor dining to its restaurant on the Upper West Side, where it already has a bustling outdoor dining scene. But its sister location in Times Square will remain shut.
“Carmine’s Times Square will not be reopening on Sept. 30. We will wait until things get better in the area. It is too cost-prohibitive to open at 25 percent,” said Jeffrey Bank, CEO of Alicart Restaurant Group. “It makes some sense to reopen Carmine’s uptown because there is a neighborhood and lots of takeout. In Times Square, there is no theater, no tourists and no one in the office. Basically, there are no customers. Times Square needs its own Marshall Plan. Indoor dining at 25 to 50 percent capacity is not going to cut it.”
Michelin-starred chef John Fraser, meanwhile, plans to delay opening his new restaurant in an office building at 1740 Broadway near Carnegie Hall until it can operate at 50 percent capacity, a source said. Fraser didn’t return calls by press time.
In an effort to survive the pandemic, the industry is pushing hard for another federal aid package in the form of the Restaurant Act — a $120 billion grant fund to cover expenses between 2019 and 2020, projected revenue for payroll, rent and other expenses.
The pain is real. Even with outdoor dining and government funds, 83 percent of all New York City restaurants, bars and nightlife venues didn’t pay their full rent in July — and 37 percent paid no rent at all, according to a survey of 500 restaurants, bars and nightlife-venue operators conducted by the New York City Hospitality Alliance. Those numbers are expected to get worse as money from the feds’ Payroll Protection Program runs out next month.
“It’s not about making money. It’s about survival,” said Andrew Rigie, head of the Hospitality Alliance. “We need support from the federal government — and all levels of government — to try to keep us open until we can get back to 100 percent occupancy and when consumer behavior and spending gets back to prepandemic level.”
Natalie Camerino says she will start serving food indoors at her Korean eatery in Soho, Umma by Noodlelove, as soon as she can — but acknowledges that she’s able to do so only because she’s received a rent break from her landlord to allow her to continue operating.
“We are fortunate and lucky to have a wonderful landlord who is accommodating and understanding of our situation and believes in us,” Camerino said. “Not everyone is as fortunate. That’s how we were able to work through this.”
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