Your money as you consider whether you should buy this stock as well. Ive got great guests today to go over 24 as welthis as well the Investment Committee is here as always. And were anticipating the ipo and jon fortts interview with Frank Slootman leslie picker is with us too and steve, you wanted an allocation and you didnt get it, but you why did you want a piece of this action well, i readprospectus, a strange thing to do for a great deal and the growth is phenomenal when they cite their retention rate, it is 158 which means that they are upselling, their accounts are taking on more are product. So i love the cloud. This is ai for the cloud it has a blue chip list of clients of accounts. So why wouldnt you want it. You dont find that growth anywhere and so everything checked on the box. So maybe if brad will give me some of his, well continue our friendship looking forward to that. And i have Pete Najarian who called in who is unhappy as well you wanted a piece of this too and you didnt get it either no, and ill tell you what, it was one of these situations where you really do start to expect that you are going to because of what level you are in terms of a customer. But it didnt happen when you look at retention rate in this cloud world that were in right now and all the data that is being collected, this is an unbelievable opportunity. And if you could get in, you really wanted to get in and i think steve and i both are in the same camp right now. But when you have buffett and all these others that got in at different rounds, it certainly is something that does intrigue you because ive been waiting for this for a long time, following this one long the way. And it is a disappointment, but still excited for the markets because i think that this will be a really i think that it will be a recordsetting ipo certainly the Biggest Software ipo of and biggest ipo of 2020. And that is the view from two pros, if you will. And interesting when you think about what the socalled average joes might be thinking on twitter, somebody tweeting all the main street people are asking me about snowflake, even people who never owned stocks, it is insane so liz young, what does that tell us when the current environment that were in . I think that tweet tells us something is that weve all been talking about for a long time, that the individual investor in this recovery and in this environment regardless of the recovery is a new you force to be reckoned with and it has a lot of power there are so many people interested z in investing in stocks and this is in the perfect spot we have it in the tech space, a ton of interest in equity markets overall because of tina, because there is no alternative. So well continue to see that demand and then just examples from steve and pete that there are people out there still with demand that couldnt get their demand met so an interesting experience to all of us. I would expect demand to continue and although this is a pretty big difference between ipo prifs and what were expecting for it to trade at, i dont think that it is a huge surprise. And jon fortt, you know this space better than anybody. Why is there so much hype around this i think that it is the Revenue Growth rate so focused in cloud and the scale that they have achieved already. You combine that with slootmans track record he has picked this company, he has grown this company and this company as an impressive list of customers. And i have to mention that Revenue Growth rate at the same time but it is also spending a lot on sales and marketing. So interesting to hear over time what the companys philosophy is on that path to profitability that we have always talk about is it more amazonlike where the scale and ambition that they have is so huge that they are not even talking about really getting profits into focus, or is it Something Different . Given that it got this valuation with the level of spending that they are doing on growth, it sure seems like he has a mandate to continue to have his foot on the gas pedal. We have very exciting guests to bring into the conversation we have the founder and ceo of altimeter capital, and also the lead independent director for snowflake, former ceo as well of that company and oh, by the way between the two of them, they own more than 35 of this company. Great to have you with us. Mike, given your role here and how far instrumental you were in the earliest days of snowflake, what do you make of this story were talking about right now . You know, thank you for having me on, and i try not to pay too much attention, ill defer to brad on anything financially related or valuation related. Were more focused on building a great product and serving customers. And excited to see that the world is starting to understand what the incredible product it is and you gave snowflake its name way back when. Your firm sutter hill ventures recruited most of the first critical employees, which is somewhat rare. And you are the guy who got slootman to get off the sailboat and come into the board room yeah, it all started with the founders who are incredibly humble talented guys and my partner doug moore helped recruit the Engineering Team and my partner chad peat helped hire 500 people. So it has been a great partnership. And as we wait for the as to being to actually open, Frank Slootman will be with us in a moment jim cramer called it the richest highest priced ipo weve ever had, the toughest ever to value. You go from 75 to 85 expected range to what were talking about now, which is 230 to 235 a valuation that earlier this morning felt like okay 30 something billion, maybe i can get behind that, to 60 something billion twice a twitter. Does this make sense to you as an investor . Well, scott, i will certainly admit that the heart is beating a little faster right now than it usually does when i come on the show but seven years ago, i asked miami a very simple question and mike is humble as well he is a visionary in Silicon Valley and was instrumental in this idea. But i asked him a simple question, before we even had a dollar in revenue, which was if everything we assume and want to go right goes right, how big is the prize . And he looks at me without missing a beat and he said it is the biggest prize in software. The cloud fundamentally rearchitects where data sits, how it is processed and how we glean insights and if you think about the off line world, or are are a cal, microsoft, ibm,off a trillion dollars of enterprise value sits in kind of the offline world, the precloud world of data, databases and data insights. And so there is a lot of excitement today, there will be a lot of gyrations, markets get ahead of themselves, they um ultimately themselves. But snowflake is growing and valuable because it sits at the heart of these two mega trends im just thinking about you as a very successful investor. If you werent already involved in this story, could you get behind something that is more than 100 times sales i mean these numbers are blowing people away and im sure they are for you as well when you make comparisons to today and the times of 1999, more than 100 times sales, that is not one red flag, that is like 50 red flags, is it not . You know, ive said many times on your show you cant be a growth investor if you are focused on the next 12 months. As mike said, were focused on the next three, five, seven years for snowflake. Were absolutely convinced that this is one of the most iconic products, iconic Software Companies of the next decade we have such an incredible leadership team. You know, from the product team led and the sales team, and lets not forget all the people i do think when we look back ten years from now, just like we breathless in the early ipos, ultimately these companies that are iconic businesses will grow into their valuations and if you are looking at the next 12 months and im watching your show, i think that you really have to look out further to understand why this is and you are not the only player, right, in the space. And i noticed an article in which an oracle executive was throwing shade at the company and i want to read this quote in terms of talking about the Competitive Landscape going forward. And i would like to get your reaction to it if i could as well this is from an oracle executive to fortune magazine. Snowflake took a number of short cases to bring its single purpo purpose product to market quickly. Customers dont want specialli ed databases how do you respond to the shade being thrown in direction of the company today . You know, first id take a step back and say that you will have competition and the competition will come and come again. So we humbly go out and try to build the best are product and solve customers problems as best we can. Well have competition and it will keep coming so we know that is true and well keep on working hard and innovative and serving customers as best we can with respect to specifically saying we took short cuts, that is nonsense. We have the best Technical Team on the planet, i think we have the best product before and Great Security and architecting for the cloud from the ground up, we were able to build a product that is quite a bit better than anything else. Not that snowflake needed any additional cred additional credibilitcredibilita ask the berkshire investment do for you . The salesforce investment and partnership is proceed found when you think about analytics, you want to find all the different variables that drive the desired outcome. And that is sales. And a lot of the sales day take is in salesforce so that partnership is actually fundamentally a good thing for our customers and for the customers at salesforce. Com. And of course Warren Buffett is the greatest investor on the planet and were humbled that berkshire is making a bet on snowflake and well work hard to make it woort thit worth that b. And both of you deserve a congratulatory wish from me. It is just a big day for you so congratulations i know, mike, it is a Long Time Coming and anytime you own 20 and brad you own 15 , it will be a big dayno doubt for you as an investor so congratulations it is certainly well in order. I do want to hear from other members of our Investment Committee too. Jim, do you want to get in on this action . Well, obviously this is a fabulous story and it is an intersection of a space that is hot with people who are on the Management Board of directors who are wellknown Value Creators so it is not a surprising result i think the question hangs out there, what does this say about the market overall im not worried about the market overall. First off, there arent enough ipos like this out there that is what this demand is showing. There isnt enough m a activity out there. And what im trying to address is some people would look at a double on the ipo as indicate of it of froth in the market and im just telling you i dont think that there is enough signs elsewhere in the market to give you concern. This is a specific case of a fabulous aproduct run by fabulou people and joe, the narrative has also been out there this morning about this idea of looking for growth beyond the big five and that is one of the reasons why you see those numbers in the upper right hand corner of your screen now for something priced at 120 now indicated at 225 to 230. People are hungry for growth and they are hungry for it perhaps out of the most marquee of names. And i think that that is why investors like brad, investors like p have really communicated really mining for these Growth Opportunities in the private markets. And what comes to fruition is a day like today where brad can celebrate the success that he will he will enjoy but scott, this is a nearly perfect ipo. It was talked about in the prior three weeks. I can tell you that i received multiple Text Messages and phone calls from individuals asking me about snow im not surprised about the strength of where this company will come out. And clearly you have t congratulate the Management Team for developing these fundamentals surrounding the business this is a unique circumstance as it relates to Data Warehousing understand how antiquated and how disruptive snowflake has been in that space the ability to scale and to leverage and allow for Cloud Computing opportunities that were measured in the hundreds can it now be measured in the thousands by utilizing this software so i think that this is a great day for the capital markets, for inve investors that mine for the opportunity, and i would sgenext fundamentally that it will grow in its valuation for many years to come. These kinds of ipos, leslie, dont come around very often you can count them really on one hand in terms of size, but also of interest and oh, by the way our data team says that on cnbc. Com the top ticker search this morning for interest is snowflake. You have a lot of views there. Just gives you an idea of what were talking about as you followed this story certainly towards this day yeah, i think weve mentioned the word scarcity a few times. And i think scarcity is really the best descriptor. Scarcity in terms of float this company is floating 10 and a lot of that is already being purchased by big investors it is scarcity in terms of ipos growing at this size that has also brought investors to the table and also scarce in a kind of market where you see so much concentration around five big tech name. So investors are saying where can i turn to help outperform the market and they are looking at ipos as a way to do that. And when you have this momentum and this buzz, when you hear from different syndicate desks that people are trying to get that allocation and doing whatever it takes to get it, that creates a lot of this momentum one thing that i would caution is that scarcity itself, it may be a short term short term investing thesis, this company is coming out at what it indicates to open about 70 times forward revenue. That actually makes it the most Expensive Software ipo going back at least ten years. So, you know, when we look at valuations like this, we have to also assess what the long term potential is and the ability to really grow into those valuations brad, do you want to speak to sort of the scarcity value, this idea because you are a able tenotable tech investor. You have to get growth somewhere other than the big five, dont you . Search the case but i dont want to understate the insights that investors have here ive received a lot of investment mem he knows over the course of the last couple weeks from world class investors who are building their five to ten year forecasts for this business doing a traditional discounted cash flow. And all of them raised their hand and said based on that, we want to own more of this at the prices that were talking about today. So ultimately the Company Knows the expectations are high, it is a world class Management Team. And while it may get ahead of itself depending on your point of view, i think for investors like berkshire who take a much longer perspective, altimeter is both a buyer into the ipo today and we intend to beholders and partners with in company for a long time to come. So if you are just taking that 12 month view and looking at the price to sales, i think that you will constantly be disappointed in not only markets like these, but all markets. You really need to take a much longer term perspective and be willing to tolerate drawdowns in this stock if rates go up, you could see all software multiples come in by 20 , 30 , and if you are not willing to tolerate that, you shouldnt be investing in growth companies. Not every investor has the luxury or discipline to be able to do some of those things there are 12 minute traders and there are 12 year traders and in between. And jon fortt, were waiting for Frank Slootman wans the stooncek opens. And what im trying to do is shift my thinking so that im thinking about the Retail Investor now who is watching cnbc, not the people who got it at 12 or even earlier and who oechb huge stakes in the company, but investors trying to decide where to put their money. What makes sense i wonder, mike, what you think the most important metrics are for a company like this at this stage. Is profitability even entering your 3450i7bd whenmind when youd off microsoft, google, oracle, all the biggest names in the space . Or are you really just focused on product quality and top line growth of course in the long term the value of a company is dko de cash flow. So of course we care but the best way to be profitable in software is to be big and win the market so revenue is very important, but as frank oftentimes says, there is a cost to getting revenue and you need to be smart about it profitability is not the current focus, the current focus is to drive to a business that can generate a lot of cash flow in the future be very significant in the marketplace. This is a market where it is not winner take all, but there are a handful of big winners and were working to be one of them. And we do need to focus on the cash flow, but right now, the focus is to build an incredible product, serve customers well, Grow Market Share and do it responsibly. Steve, do you want to address the idea of scarcity as investors are trying to figure out where the best bets for the money is are i think one of the most interesting points about this, if you go to any dictionary and you look up the term value investor, you will see Warren Buffetts name yet here he is investing in this company very visibly so value is where you perceive it to me this Company Represents this value longer term and that is why when you take it in conjunction with the whos who investing in it, a Brilliant Technology ceo in salesforce and buffett, then the ped crew of the people involved, that creates the scarcity effect. So you have a pure play in cloud. Amazon is a great company, but not a pure cloud play. Microsofts cloud businesses may not be all th