Greg Abel, the new CEO of Berkshire Hathaway, has made a bold move by investing $600 million in the Bending Spoons IPO back in July.
The Milan-based tech company raised $1.68 billion during that offering at a valuation of approximately $18 billion, marking a significant market debut.
Abel later added another $330 million to the position through a private placement, bringing Berkshire’s total investment in Bending Spoons to $930 million.
The combined purchases give Berkshire roughly a 4% stake in the company, a position now worth more than $1.4 billion based on recent trading prices.
This represents a 55.3% gain on Berkshire’s overall investment of $930 million, a strong early return on what was an unconventional bet for the conglomerate.
The move is notable because Warren Buffett famously argued that IPOs carry too many sell-side incentives to make sound investments, yet Berkshire participated directly in this one.
It remains unclear whether Abel or Ted Weschler, who manages approximately 6% of Berkshire’s equity portfolio, was ultimately responsible for initiating the purchases.
Bending Spoons carries significant financial leverage, with $4.09 billion in net debt, representing 2.4 times adjusted EBITDA and 3.25 times shareholders’ equity.
The company has set an aggressive 65% internal-rate-of-return hurdle on a levered basis for recent deals, signaling management’s confidence in its acquisition-driven strategy.
Management has identified over 1,000 potential acquisition targets with total revenue exceeding $400 billion, suggesting the growth pipeline remains substantial for years to come.
Bending Spoons has also invested heavily in artificial intelligence, using AI across its portfolio of businesses to drive worker productivity and operational improvements.
Organic growth of just 3% in the second quarter does raise questions about how much the company can expand without relying on further acquisitions to fuel its top line.
For Berkshire, the stake introduces a software holding into a portfolio that has historically concentrated on industrials, insurance, energy, and consumer brands.
Barron’s Andrew Bary noted that many Berkshire shareholders want more stock investment given cash reserves exceeding $350 billion, but found the Bending Spoons bet surprising given the company’s high valuation.
Shares of Bending Spoons closed Friday at $47.07, placing the company’s total valuation at approximately $30 billion after giving back part of an earlier gain.
Abel’s decision to add another $330 million at a higher price than the IPO within four months signals strong conviction in Bending Spoons’ acquisition-led business model.
Investors will likely watch how the company integrates recent purchases, manages its growing debt load, and completes Berkshire’s private placement over the coming quarters.
