Author Topic: SNOW - Snowflake  (Read 4272 times)

Seth Lowry

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SNOW - Snowflake
« on: September 16, 2020, 08:42:15 AM »
This reminds me of the Intrepid Potash deal when I was in banking. Clients calling in and threatening to pull their entire prime relationship if they didn't get an allocation. Potash prices only go up! $659/sh ->$8 over 12 years. Arguably a much better business here but the implied competitive advantage period is astronomical/record/insert verb


dwy000

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Re: SNOW - Snowflake
« Reply #1 on: September 16, 2020, 08:46:21 AM »
It's like 1999 all over again.  Rapid growth, no profitability and a first day trading price massively above the oversubscribed IPO price. 

aglittell

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Re: SNOW - Snowflake
« Reply #2 on: September 16, 2020, 08:51:16 AM »
Did some work on this last week - it seems like a great business that I'd like to own. The link below does a comprehensive deep dive. I actually planned on participating at $120 but with where this is pricing ($240 range), it is a good portion of the TAM that mgmt outlines at $80bln. I'm hoping this will follow a path similar to the FB IPO, beautiful business but pricing at IPO got aggressive.

https://hhhypergrowth.com/a-snowflake-deep-dive/

nickenumbers

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Re: SNOW - Snowflake
« Reply #3 on: September 16, 2020, 08:53:17 AM »
All I can do is laugh.  A good story [SNOW] + Marketing + Scarcity and everyone forgets about the math and buys it at any price.

 :) :) :)

Kids do like candy! 

Baaaahhhhh
The fastest Cheetah still waits for the lame baby antelope.  ..patience..

Broeb22

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Re: SNOW - Snowflake
« Reply #4 on: September 16, 2020, 09:17:00 AM »
What's interesting about the infographic from the infographic towards the end of this write-up is that Snowflake is kind of sandwiched between a number of different tools.

I don't know that their offering is something that exists well on its own. Based on who they compete with (Azure, Google Cloud, AWS) what Snowflake does is just one part of the process. It's important in a way by helping to aggregate date from a variety of sources, but I am skeptical of their solution as it stands (and as I understand it) because it seems like more of a point solution than solving a number of different use cases.

In short, I guess I would rather "own the customer" in a sense by owning their data (AWS, Salesforce, Oracle, SAP, etc.) than to be what seems to be a somewhat interchangeable functionality.

When I think about which businesses really seem to have staying power, its the companies in the top left part of that infrographic that seem to have durable businesses. The further to the right seems less and less "sticky" unless bundled with other solutions. 

https://blog.publiccomps.com/snowflake-s1-ipo-teardown/

Not investing in this (or most Saas businesses) but its interesting to think about and try to understand.

Honestly MongoDB seems interesting as I understand the pieces more...

fareastwarriors

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Re: SNOW - Snowflake
« Reply #5 on: September 16, 2020, 09:41:00 AM »

Snowflake opens at $245 per share in market debut, after pricing IPO at $120

https://www.cnbc.com/2020/09/16/snowflake-snow-opening-trading-on-the-nyse.html


$ rain dance anyone?

Saluki

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Re: SNOW - Snowflake
« Reply #6 on: September 16, 2020, 10:20:45 AM »
Just checked the quote in my brokerage account, high tick was $319, its at $246 now. 

Congrats to whoever got in at the IPO price and my condolences to whoever got in at the top tick.  That's a lot of money to lose in less than an hour.
If it's important, do it every day. If it's not important, don't do it at all.  -Dan Gable

Liberty

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Re: SNOW - Snowflake
« Reply #7 on: September 16, 2020, 10:42:59 AM »
Tweeted this before it opened based on the indicated trading:

Quote
SNOW raised money at $12bn earlier this year. Either they basically gave away a chunk of their company to private investors, or there's a massive amount of turbo-FOMO going on... Not saying $12bn is the correct valuation today, but 5x that may be a little... extreme?

Peaked even higher than that briefly.

OnTheShouldersOfGiants

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Re: SNOW - Snowflake
« Reply #8 on: September 16, 2020, 11:45:33 AM »
I have absolutely no expertise in the space, so I ask those of you that do. Does Snowflake have an offering that much better than for example a competing AWS product?

valueseek

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Re: SNOW - Snowflake
« Reply #9 on: September 16, 2020, 12:24:48 PM »
For a 5 year hold at 15% IRR at $75B market cap. currently, market cap. needs to be $150B by year 5. At 20 times forward rev. it is $7.5B or 15 times the ~$500M currently or grow rev. at ~70% annually. At 40 times forward rev. at year 5, it is around $4B rev. or 7-8 times the ~$500M they need to grow rev. ~45-50%. They should be doing probably well in terms of rev. growth right out of the gate that might suppress the need for such high growth rates in subsequent years. One can do similar simplistic analysis for 10 year out hold and/or change the rev. multiple to whatever seems appropriate to each.