Snowflake Shares Drop 20% as CEO Slootman Retires

Snowflake, a leading cloud computing company, experienced a significant downturn in its stock value, plummeting over 20% in after-hours trading following the announcement of the retirement of its billionaire CEO, Frank Slootman. The stock, which closed at $230 on Wednesday, dropped to around $173 after the news broke.

Slootman, who has been with Snowflake for nearly five years and played a pivotal role in its historic initial public offering (IPO), will step down as CEO but continue to serve as the company’s board chairman. He will be succeeded by Sridhar Ramaswamy, Snowflake’s senior vice president of AI and a former executive at Google’s advertising products division.

While Slootman did not provide specific reasons for his retirement, he expressed confidence in Ramaswamy’s ability to lead Snowflake into the future, particularly in the realm of artificial intelligence. The change in leadership comes at a critical time for Snowflake, as it looks to capitalize on the growing demand for AI-driven technologies.

The steep decline in Snowflake’s stock price erases the gains it made in February, when its stock reached a high of $236 per share. The company’s fourth-quarter earnings, announced concurrently with Slootman’s retirement, showed strong performance, with $774.7 million in sales and $738.1 million in product revenue, marking a 32% and 33% year-over-year increase, respectively.

Slootman’s tenure at Snowflake has been marked by notable achievements, including overseeing the company’s IPO in 2020, which was the largest-ever in the software industry, valuing Snowflake at $64.9 billion. Prior to his time at Snowflake, Slootman took two other companies public, Data Domain and ServiceNow, the latter of which now boasts a market capitalization of $155.7 billion and reported $295 million in net income in its latest earnings report.

The transition in leadership at Snowflake comes at a time of both challenge and opportunity for the company. As it navigates Slootman’s departure and the market’s reaction to the news, Snowflake will be looking to maintain its position as a leader in cloud computing and capitalize on the momentum it has built in recent years.