back to article Snowflake rolls back growth estimates, wipes 30% off value

Cloud-native data warehouse outfit Snowflake – once valued at a heart-thumping $120bn following its 2020 IPO – saw 30 per cent wiped off its value in after-hours trading yesterday as it lowered guidance on revenue forecasts. Execs said part of the reason for reducing growth estimates was that new product features meant …

  1. hoola Silver badge

    Valued At $$$$$

    This is where the insanity of many of the valuations for these Cloud service or providers comes in.

    Was it ever worth $120Bn? Probably not.

    Is it making a profit? nowhere near, losses are humungous, $700 I think so far.

    Has it any assets? Allegedly $5.9Bn

    That takes us full circle, just like Uber and all the others, they are simply not worth what "The Markets" claim but there is a vested interest to pump up the value at the because of all VC money. They need their return.

    1. Anonymous Coward
      Anonymous Coward

      Re: Valued At $$$$$

      It's not just that, though I'm sure there's plenty of incentive to manipulate prices higher. The bigger problem is that the world's central banks have been not only handing out free money but cramming it down everyone's throats for 20+ years now. That money has to go somewhere, and most of it has gone into speculation. That's because investment takes decades to pay off in the form of steady profits while speculation can make you rich(er) in a week. If it doesn't work out, just default and move on, but it pretty much always works out because the free money keeps gushing so prices and multiples keep going higher. It's called the allocative effect and it's the result of one of the worst errors in human history.

      So on the one hand, the people who paid $120b to own Snowflake were setting fire to their money. On the other, most of that money was never tied to any kind of value creation to begin with. The losers are the suckers who gave up something of value to get money, like their irreplaceable time or valuable natural resources, then spent it on worthless or overpriced assets. The winners? Rich people with access to the free money spigots. What a wonderful world the central bankers have created for us!

  2. Anonymous Coward
    Anonymous Coward

    Never mind the growth slump - look at those losses! Hard to see how a business that hands over such a significant chunk of everything it takes in revenue to the underlying cloud providers. Those are simply unsustainable figures unless the explosive growth fairy comes a-visiting again.

    Which it won't, because the cat is out of the bag about what Snowflake really is. The hype bubble is over.

  3. Doctor Syntax Silver badge

    Is the thaw setting in?

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