Berkshire Hathaway bought more shares of Bending Spoons, and the market treated the filing as a verdict on the software company’s listing.
The stock closed up 41 percent on October 14. New securities filings show Berkshire subscribed for 10 million ordinary shares at $33 each, a commitment of $330 million that takes its stake to 4 percent. It is the second purchase in three months. Berkshire invested $600 million when Bending Spoons listed on the Nasdaq in July.
The size of the position explains less than the identity of the buyer. Berkshire has spent decades avoiding technology companies on the grounds that it cannot forecast their futures, and it has concentrated its portfolio in insurance, railroads, energy and consumer brands instead. The exceptions have been large, well understood and bought at prices the company considered conservative. A $330 million stake, added four months after the first, is small next to those commitments. It is also the clearest signal available about how the company is being run under Greg Abel, who has led it since taking over as chief executive.
Mr. Abel inherited a portfolio built over six decades and a shareholder base that expects continuity. His early moves have been read by analysts as a test of whether the discipline that produced the record survives the transition. Buying more of a newly public software company twice in one quarter is not the kind of decision the portfolio has historically contained.
Bending Spoons is a software company that listed on the Nasdaq in July. Its shares have traded publicly for a single quarter, and its disclosure history as a public company amounts to one listing and one earnings cycle. Analysts said that limited record is part of what makes the Berkshire purchase notable. The company’s own analysts and money managers do not normally stake capital on that little public information.
The 41 percent move on the day the filing became public suggests investors read the commitment as a form of due diligence they cannot perform themselves. Berkshire’s investment process involves access to management and internal documents that retail holders never see, and the firm’s willingness to add to a position that is four months old is being treated as evidence that what it saw in the first look still holds.
Subscription pricing matters for how the trade reads. At $33 a share, Berkshire’s purchase was struck at a level set in a negotiation rather than in the open market. Investors who bought the stock after the filing paid a price 41 percent higher than the one the company’s newest large holder paid. The gap between the two is the value the market assigned to Berkshire’s judgment in a single session.
There is a version of this that is less flattering. Concentrated positions held by respected investors attract followers, and followers buy the shares of companies whose businesses they have not examined. A stock that rises 41 percent on the disclosure of a $330 million purchase has been repriced by something other than a change in the company’s earnings prospects, because nothing in the filing changed them. The purchase moved capital into the stock without changing what the company sells or who buys it.
Berkshire’s own record with technology investments is mixed enough to make the enthusiasm look premature. The company’s largest technology position was built over years and took a long stretch to be vindicated. Its other forays into the sector have been fewer and smaller. Two purchases of a company that listed in July do not establish a pattern, and the disclosure of a stake is not the same as a public endorsement.
What the filings do not show is the reasoning. Berkshire does not explain individual purchases, and Bending Spoons has not commented beyond its own disclosure obligations. Shareholders are left to infer the case from the terms: a 4 percent stake, a price fixed at $33, and a decision to double down before the company had reported more than one set of results as a public company.
Analysts said the second purchase is more informative than the first. An initial investment in a company that is about to list can be arranged with the company’s bankers and priced alongside other institutional allocations, which makes it partly a function of the listing process. A subsequent purchase in the open market or through a private placement, months later, with the shares already trading, is a standalone decision. That is what Berkshire made.
The reaction also says something about how thin the market’s conviction is. A single 13F-style disclosure moving a stock 41 percent indicates that few investors held views strong enough to sell into the move. In a company with a longer trading history and wider ownership, the same news would be absorbed without a fifth of the market value changing hands.
For Bending Spoons, the practical effect is a lower cost of capital and a shareholder register that now includes the most closely watched investor in the United States. Both help when a company needs to raise money or make acquisitions. Neither changes the requirement to report results every quarter going forward.
What Berkshire will do with the position is the question the filings cannot answer. The company has held investments for decades and sold others within a year, and its disclosures arrive quarterly with no accompanying explanation. The next one will show whether the stake grew, held or shrank. Until then, the market is trading on the inference that a purchase made twice in four months will not be abandoned quickly.
