This post was last updated on October 3rd, 2020 at 01:49 pm
Snowflake IPO, My Take on the Stock Rising 111% on its IPO Date
In this blog post, we’ll look at what the company Snowflake actually does, and will walk through why the Snowflake IPO shot through the roof, literally booming more than 111% on its first active day of trading on the secondary market. To give you a small snippet of what Snowflake actually does as a company, Snowflake is a Cloud Based Data Storage company and analytics service, and functions as what is essentially a “data warehousing service.” If a company was a gigantic SQL database, then this is just that. Whether or not they can compete with other large data warehousing companies however, such as Amazon Web Services, especially with a net operating income of Negative $400,000,000.00 last year, and with earnings of -$350,000,000.00 last year, I think probably not. In this blog post, I am going to hammer the Snowflake IPO into the ground, telling you why they are not a special Snowflake, and of why their most recent stock performance and market cap is not going to hold over the long term. As always, be sure to comment down below with your thoughts and opinions on the article, and to subscribe to our blog for additional details and information.
Other top IPO’s that have skyrocketed in recent weeks include the following:
Global Index Funds
United States Index Funds
The Nikkei 225
And a host of other similar and related IPO’s, read on or subscribe to our blog for additional details and information.
The Snowflake IPO, Why They Will Never Be Able to Compete with Amazon And Why Their Valuation of $63 Billion Is Absolutely Insane
Snowflake growing by 111% on its first day of public trading was definitely nothing more than a castle in the air prop up by news articles, public speculation and momentum. A company that made negative $400,000,000.00 last year with a valuation of $45 Billion is absolutely insane, and in fact is absolutely a castle built on sand. Personally, I would definitely SHORT this stock, rather than holding a long position on the security, and in fact would even be inclined to take out a leveraged short position on this using Put Options, in that the fundamentals and the Price to Earnings multiple of Infinity that this company currently holds, is not something that I can see holding for any significant medium to long term period of time. I don’t know a whole lot about date warehousing, or about the specifics of what the company actually does, but I do know finance, and I can tell you that Initial Public Offerings that double in price on shoddy financials, in the midst of a financial and economic crisis typically are not a good long term stock to hold. This stock is literally poison, take your gains and get it out of your portfolio as soon as humanly possible.
Final Thoughts on The Snowflake IPO, And Why I Would Hold Zoom or DocuSign During The Pandemic Any Day Over This Special Snowflake
So much for holding that in and sugar coating how I really feel about this company, but I absolutely am a trader that only buys stocks for the long term, and on fundamentals (I have no problem with trading technicals as long as the fundamentals of the company also make sense) and in this case, the fundamentals absolutely just don’t add up with this company. If you are going to be purchasing Snowflake, or any other upcoming Data Warehousing Initial Public Offering’s for that matter, make sure to only hold it in your portfolio over the short term, and to not see this as a long term play, you won’t be sorry that you divested from your Snowflake holdings, trust me. For more information on all things Finance, Accounting and news, be sure to subscribe to our blog, and to comment down below with your thoughts and opinions on the blog post.
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