Berkshire pays $33 a share for $330 million more of Bending Spoons; the stock is up 45%

Berkshire Hathaway is investing another $330 million in Bending Spoons, the Italian serial software acquirer that listed on the Nasdaq on July 1. According to CNBC's report on the securities filing, Bending Spoons will issue 10 million ordinary shares to Berkshire at $33 each, which lifts Berkshire's stake to 4%. Shares of BSP were at $54.89 at 12:50 p.m. ET, up $17.03 or 45% from Tuesday's close of $37.86, per Nasdaq.com.

The number behind the number: the price Berkshire paid

Most headlines lead with the size of the check. The more useful figure is the price. At $33, Berkshire is paying about 12.8% below Tuesday's $37.86 close, and about 40% below where the stock is changing hands now. This is a private placement of newly issued shares, so the money goes to the company, not to existing holders.

The paper gain is simple arithmetic: 10 million shares times the $21.89 gap between $54.89 and $33. It moves with every tick, and a private placement can carry resale restrictions that we have not seen in the filing, so treat it as an illustration of the gap rather than a realized profit.

What the company said it is for

Francesco Patarnello, a co-founder and head of business acquisitions, said in a statement that the company "continuously evaluates M&A opportunities, and our pipeline remains strong," and that the investment will "further enhance our financial flexibility and ability to pursue attractive acquisitions as part of our broader financing strategy," according to CNBC. In other words, this is acquisition funding. Bending Spoons' model is to buy established software products and run them on its own platform, so the cash is a signal about the pace of deals more than about any single product.

The second check

CNBC reports Berkshire put $600 million into the company in July, during the IPO. With $330 million now, Berkshire has committed about $930 million across the two purchases. CNBC notes the investment comes under CEO Greg Abel, who took over from Warren Buffett at the start of this year.

How to read a 45% day

• Volume is large. About 12.5 million shares had traded by midday, against an average volume of about 2.4 million, per Nasdaq.com. That is five times the normal pace.
• The stock is near its range high. The 52-week range is $30.11 to $58.94, and the day's range so far is $49.21 to $58.56. It has not traded below $49.21 today, well above the $33 placement price.
• Market value is about $37.8 billion at the quoted price, according to Nasdaq.com's summary page.
• One investor's check is not a valuation. A 4% holder has no say over the price paid by everyone else, and the company has been public for only three and a half months.

Who this matters to

For owners of small software companies, the useful read is that a well-capitalized buyer with a stated acquisition pipeline just got more cash. For traders in BSP, the question is whether a 45% one-day move has already priced in the news. The filing does not answer that, and neither do we.

Sources: CNBC; Nasdaq.com quote and summary data, taken 12:50 p.m. ET and delayed or changing. Reuters, Bloomberg, the Wall Street Journal and the Financial Times also reported the investment. This is market information, not investment advice.