Less Dumb Investing

My theory is that someone big is liquidating

So, Snowflake had a data breach. Well, they probably had a data breach well before we heard about it, but on June 7th, 2024, they finally reported it. That’s when the news really started to buzz about the whole Snowflake breach fiasco.

So you’d think that Snowflake stock price would drop pretty heavily in that time frame, and you’d be right. And wrong.

A month ago, Snowflake was sitting pretty at $163.37. Fast forward to June 7th, 2024, when they disclosed a data breach, and the stock closed at $131.21. That’s about a 22% drop in roughly three weeks. Interestingly, since the hack was disclosed, the stock hasn’t moved much. So, clearly, the price action isn’t because of the hack.

So what’s going on here? Well, the easy answer is: we don’t know.

But here’s my theory: I think Berkshire Hathaway is closing out its original position. In their latest 13F, Berkshire reported holding over 6 million Snowflake shares. Companies don’t have to disclose when they’re selling off their positions, only when they’re buying. The price action we’re seeing in Snowflake doesn’t make sense otherwise—unless I’m overthinking it and it’s just a case of more sellers than buyers.

A short article because theories without evidence shouldn’t carry that much merit. But it’s not a bad theory.