On October 14, one stock had two prices on the same day. Berkshire Hathaway agreed to buy 10 million new shares at $33 each in a $330 million Bending Spoons private placement. A few hours later, everyone else was paying about $51 for the very same stock, after shares jumped 34% to $51.10, Reuters reported.
So why does the most famous investor in the world get a lower price than everybody else? And who pays for the gap?
What a private placement actually is
When a company wants new money from stock, the usual route is a public offering: banks market the shares, many investors bid, and the shares start trading. A private placement skips the crowd. The company picks one buyer, agrees on a price in private, and creates new shares just for that buyer.
Bending Spoons’ filing with the SEC spells out the details. The shares were offered without any public marketing. They are not registered with the SEC, which means Berkshire cannot simply sell them on the open market. To fix that later, the deal includes registration rights: a promise that Bending Spoons will do the paperwork that lets Berkshire sell the shares if it ever wants to. The deal is expected to close in the fourth quarter.
Why the buyer gets a discount
Based on Reuters’ numbers, Bending Spoons closed at roughly $38 the day before the announcement. That makes $33 about 13% below the market price.
That discount pays for three things:
- Waiting. Berkshire’s shares are locked up until they are registered. A normal investor can sell any day. Berkshire cannot.
- Certainty. Bending Spoons gets $330 million from one phone call. No roadshow, no risk that a public offer flops on a bad market day.
- The name. This is the unusual part. The buyer is not just bringing cash. It is bringing a signal.
What the market really paid for
$330 million is small money for a company valued in the tens of billions. The stock did not jump because of the cash. It jumped because of who sent it.
Berkshire already put $600 million into the company’s July IPO. This second check lifts its stake to 4% and makes it the sixth-largest shareholder, according to LSEG data cited by Reuters. A second check, three months after the first, tells the market that Berkshire liked what it saw once Bending Spoons started reporting as a public company. Bending Spoons shares rose as much as 55% during the day, Bloomberg reported.
For Berkshire, the math worked before the deal even closed. 10 million shares bought at $33 and priced at $51.10 is a paper gain of about $180 million.
Who pays for that? In a Bending Spoons private placement, like any placement below market price, existing shareholders do. New shares sold cheaply slightly shrink everyone else’s slice of the company. That is called dilution. This time nobody complained, because the Berkshire name lifted the price far more than the extra shares cost.
Where the money goes
The filing says the money is for general corporate purposes and new acquisitions. That second part is the whole business. Bending Spoons buys well-known software brands, cuts costs, rebuilds the tech, and keeps them. It owns Evernote, Vimeo, WeTransfer, AOL and Eventbrite. In August it agreed to buy Airtable for $1.29 billion. In September it signed a deal for Miro at an enterprise value of $1.355 billion.
So the real question is not the $33 price. It is whether Bending Spoons can keep finding software companies cheap enough to fix. Berkshire is betting yes, at a time when the conglomerate itself is in transition, with Howard Buffett now its chairman.
My take: Berkshire bought the discount. The market paid for the name.
Not advice. Just how I see it.