Snowflake shares: where now for the blockbuster IPO?

Snowflake: where do we go from here?

Now that one of the year’s hottest IPOs is successfully away, what can we expect next from Snowflake?

The firm went from a valuation of $33 billion to $88 billion in around ten minutes of frantic trading. It was a small float, so the big increase was to be expected, but the firm now finds itself well capitalised with cash to fund further expansion.

Learn how to buy, sell and short Snowflake shares

Snowflake still losing money

The firm continues to lose money. It did see a fall in net losses in the first two quarter of this year, but it still continues to lose prodigious amounts, with a loss of $177.2 million in the six months to 31 July 2019. But firms like Snowflake are growth vehicles, and if the firm can keep convincing investors that it is moving in the right direction to become profitable then the stock may continue to do well.

It has significant competitors, most notably the likes of Microsoft and Amazon. This will mean that the company will keep burning cash. For those who had stock in the firm before the IPO, the success of the offering gives them little reason to abandon their holdings entirely.

But for those waiting to buy, there seems little reason to rush in. A good stock will give plenty of opportunities for traders and investors to get in at a better price. At the moment, with little in the way of chart data, it will be hard to gauge when that ‘better price’ will emerge.

The longer-term growth story is attractive, but there is no need to jump in right now. Indeed, with the current market selloff accelerating, Snowflake may find itself under pressure as well.