Snowflake shares: where now for the blockbuster IPO?
Snowflake soared on the first day of trading, but can it keep this amazing growth trajectory going?
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.
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.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.