Berkshire Hathaway has agreed to invest an additional $330 million in Italian technology group Bending Spoons. Combined with the $600 million it invested when the company listed in July, Berkshire's total commitment has reached nearly $1 billion, giving it a stake of about 4%. The deal is prompting renewed scrutiny of Berkshire's technology investments after Warren Buffett's departure.
Bending Spoons disclosed on Wednesday that Berkshire will subscribe for 10 million shares at $33 each, a discount of about 13% to the $38 closing price on the day before the deal was announced. The company's shares rose for two consecutive sessions after the announcement, gaining nearly 50% in total. They then pulled back on Friday, but still ended the week more than 20% above Monday's opening price. The market attention generated by Buffett and Berkshire investments is often referred to as the “Buffett effect.”
Luca Ferrari, Bending Spoons' chief executive and co-founder, said in the announcement that Berkshire is one of the world's most respected capital allocators and has long been a company Bending Spoons studied. Berkshire has not said whether Buffett was involved in the investment.
Bending Spoons' Acquisition Model
Bending Spoons' core strategy is to acquire digital businesses, improve their profitability through changes to operations, technology, products and marketing, and then use the resulting cash flow to fund further acquisitions. The company has followed this approach for more than a decade. Its acquisitions include AOL, Evernote, Vimeo, Eventbrite and WeTransfer, and it has never sold a business of significant scale.
The company says its post-acquisition process typically involves extensive changes, including restructuring teams, updating technology architecture, redesigning user interfaces, speeding up product development and improving marketing and monetization. Artificial intelligence is also frequently part of the overhaul.
Ferrari has used Evernote to illustrate the model. When Bending Spoons acquired the business in early 2023, Evernote had about 350 employees. After 12 to 18 months, that figure had fallen to roughly 60, and the business is now operated by about 20 people. Ferrari also said Evernote launched this spring what may have been its largest product update in roughly a decade.
Why Berkshire's Tech Bet Stands Out
The investment has drawn attention partly because Bending Spoons is a technology group, while Berkshire has historically made relatively few large investments in technology companies. Apple and Alphabet are among the limited exceptions. Buffett traditionally favored understandable businesses bought at reasonable prices, with a margin of safety. Highly valued technology companies with uncertain earnings prospects and complex products or services do not always fit that framework.
The valuation also does not look like a typical bargain purchase. Bending Spoons reported earnings per share of $0.32 last year, while Berkshire's subscription price was more than 100 times that figure. The company is nevertheless growing rapidly. Second-quarter revenue rose 126% year over year to $704 million, while adjusted operating profit increased 150% to $381 million.
The two companies also take different approaches to acquisitions. Berkshire generally gives acquired businesses substantial operating autonomy, allowing founders or existing management teams to continue running them. Bending Spoons, by contrast, makes the transformation of acquired businesses a central part of its strategy.
Similarities Between Two Long-Term Owners
Despite their different operating models, Berkshire and Bending Spoons both favor holding businesses for the long term rather than selling them soon after acquisition. Berkshire owns relatively independent businesses including GEICO, Duracell, Fruit of the Loom, Pilot Travel Centers and BNSF Railway, providing acquired companies with a stable long-term ownership structure.
Bending Spoons also describes itself as a “permanent owner” and is seeking to emulate Berkshire's use of subsidiary cash flows to fund additional acquisitions. Ferrari said the company does not centralize every decision at headquarters because excessive control can weaken employees' sense of ownership. He has also spoken about his strong interest in learning across different fields, a trait that echoes Buffett and the late Berkshire vice chairman Charlie Munger's longstanding emphasis on continuous learning.
In capital-allocation terms, the investment of less than $1 billion is modest for Berkshire. As of the end of June, Berkshire had a market capitalization of about $1.1 trillion and roughly $365 billion in cash. Its largest individual equity holding was worth about $66 billion. The transaction may therefore matter less for its size than for what it could indicate about the boundaries of Berkshire's future investment strategy.
What the Deal Says After Buffett
Buffett stepped down as Berkshire's chief executive and chairman at the start of the year, and the investment may point to a shift in the company's approach. Berkshire has not explained who led the transaction. Ted Weschler, one of its investment managers, may have been involved, while new Chief Executive Greg Abel could also have played a role. This summer, Abel increased Berkshire's private-market investment in Alphabet by about $10 billion after discussing the decision with Buffett.
It remains unclear whether Buffett personally participated in the Bending Spoons deal, or whether it signals a systematic expansion of Berkshire's exposure to technology groups. The disclosed facts are that Berkshire is subscribing for 10 million shares at $33 each, while Bending Spoons traded at $38 before the announcement. Investors will continue to assess what the investment means for the valuations and acquisition strategies of both companies.