Are you sure? $570 Million Investment By Warren Buffett Built into the IPO are commitments from Buffett's Berkshire Hathaway (BRKB) and Salesforce Ventures to each buy $250 million of Class A common stock in a private placement. In addition, Berkshire will buy an additional $320 million worth of shares. Those shares will be bought from an unnamed stakeholder in a secondary transaction. That brings Berkshire's total investment to $570 million.
Yeah pretty sure. From the S-1: Salesforce Ventures LLC and Berkshire Hathaway Inc. will purchase $250 million of our Class A common stock from us in a private placement at a price per share equal to the initial public offering price. The IPO price settled at $110. Not sure about the $320MM deal with the "unnamed stakeholder" though. Didn't dig that far. Not sure if those details are in the S-1 or not.
Private placement. That doesn't really worry me... it happens. Its like a typical investment when a corp raises additional funds through equity means... but just before this one goes public and it does get around underwriting fees. The secondary transaction smells pretty bad. This means a principle was eager to dump some shares out of his own stake without waiting for the lockup to expire. And yes, he may well have sold them for less than $110. Buffet bought quite a bit of these. And yes, he can sell these at anytime.