Cloud firm Dropbox surges in Wall Street debut
- Author: Adam Floyd Mar 26, 2018,
Mar 26, 2018, 0:44
The US storage company Dropbox raised the price range for its initial public offering due to strong investor interest in the first technology IPO this year. And just before its IPO, they had placed their expected pricing range at $18-20, which means Dropbox, which is listed on the Nasdaq with the ticker symbol DBX, could be valued at $7.9 to $8.8 billion.
The San Francisco company offered about 26.8 million shares of stock at $21 apiece, while selling shareholders were offering about 9.2 million shares.
Dropbox is set to make its public market debut tomorrow, Friday. The challenge for the company moving forward will be how it can convert its large base of unpaid users in hopes of erasing its $112-million loss on revenue of $1.11 billion a year ago.
Shares jumped as much as 50 percent to $31.60 apiece in NY trading, giving the file-sharing company a market valuation of more than $12 billion.More news: New video shows Parkland deputy during school shooting
In its July 2017 Magic Quadrant report on content collaboration platforms, analyst firm Gartner placed Dropbox in the "Leader" category along with competitors like Box, Microsoft, Citrix, and Google. That's more than expected, especially given the original range of $16 to $18 a share last week, which was raised a couple of dollars this week.
The excitement around Dropbox's IPO signals a market appetite for more big tech companies to go public.
Dropbox is the biggest so-called unicorn since Snap to test the public market's appetite for tech startups. The shares offering will carry just 2 percent of the voting rights, according to CNBC, while the rest will be Class B shares now held by Houston and other major investors. It also noted that, unlike some storage providers, Dropbox does not allow customers to use its services via hybrid IT or on-premises deployments. The company's net loss shrank to 111.7 million United States dollars past year, compared to 210.2 million USD in 2016. Dropbox also has begun offering storage for businesses. The IPO was 25 times oversubscribed, indicating 25 investors wanted to buy each share that was sold.
"We've always lived in a competitive environment. and importantly all our growth has happened in that environment", Houston said.