Salesforce dumped shares of Snowflake during market crash in Q1 2022

Marc Benioff, president and co-CEO of Salesforce.com Inc., speaks at the Dreamforce conference in San Francisco on Nov. 19, 2019. Salesforce’s annual software conference, where he showcases new products and discusses its commitment to social causes, was halted for the second consecutive year by protests against the company’s work with the US government.

David Paul Morris | Bloomberg | Getty Images

Salesforce has sold the last of its shares in data analytics software maker Snowflake, according to a regulatory filing Friday.

Salesforce, which invests through its Salesforce Ventures unit, still has a stake in five public companies, including Robinhood and Monday.com, according to the filing. The company previously unloaded 95% of its Snowflake shares, reducing its holdings to $35 million at the end of 2021. Salesforce sold the remaining shares in the first quarter, when Snowflake plunged 32%.

Although Salesforce has yet to report results for its latest quarter, other large companies that are also investing in their tech peers have racked up billions of dollars in losses on those holdings. Salesforce will also have to consider mark-to-market accounting after making $3.38 billion in investment gains over the past two years when tech stocks soared.

Snowflake was a large Salesforce investment at the time of the transaction. Snowflake debuted on the New York Stock Exchange in September 2020 in the largest software IPO ever at the time. Salesforce bought 2.1 million shares in the IPO for $250 million, investing alongside Warren Buffett’s Berkshire Hathaway, who made an even-sized bet.

The IPO and subsequent rally grew Salesforce’s stake to over $520 million in a short time. Salesforce had a similar fortune after investing in Zoom’s IPO the previous year.

But everything in cloud software turned south in late 2021, as inflationary pressures and concerns about interest rates hammered the tech industry. Money-losing companies like Snowflake have been the hardest hit, while companies that have benefited from the pandemic boom in remote working are also grappling with office reopenings.

Still, Salesforce has made a nice return on its investment. The stock was priced at $120 during the IPO and traded between $164.29 and $344 in the first quarter. Salesforce had already exited most of its position in mid-2021, selling as the stock mostly traded well above $200.

A Salesforce representative did not immediately respond to a request for comment.

In a show of support for Snowflake CEO Frank Slootman, Salesforce co-CEO Marc Benioff provided a presentation text for Slootman’s book, “Rise of the Data Cloud”. Benioff said it “tells the incredible story of how Snowflake reinvented the concept of a data warehouse, creating a truly innovative cloud platform.”

Snowflake has continued to fall since Salesforce ran out. The stock is down 53% since the start of the year and fell Wednesday to its lowest level since the IPO. Stocks have rallied over the past two days as tech stocks rebounded.

In late April, Wolfe Research launched coverage with the equivalent of a buy rating, saying Snowflake offers “the best SaaS product” and noted that the stock trades at “Black Friday prices.”

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