Dropbox shares surge after March 2018 IPO

Dropbox shares surge after March 2018 IPO

IT

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.

The cloud-storage company had priced its IPO at $21 a share on Thursday, above its previously expected range. The gradual up movement of Dropbox IPO price per share is in the wake of strong anticipated demand. Here's Statista's chart of how the Dropbox IPO compares to other high-profile tech IPOs since 2011. Dropbox shares are set to start trading on Friday at the Nasdaq under the symbol "DBX".

The company reported revenue of $1.11 billion in 2017, up from $844.8 million a year earlier. But it also marks a bit of a disappointment considering that the company had been valued at $10 billion in a private investment in 2014. It stopped bleeding cash in 2015 and maintained a positive free cash flow over the following two years.

The shares quickly climbed to $31, a rise of 47.6 per cent and well above the $21 offer price, valuing the company at about $12 billion.

Dropbox was able to avoid the sea of red in the market, with shares soaring in their market debut.

Venture capital firm Sequoia Capital will retain a stake of about 25 percent.

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Its popular cloud storage platform has 500 million registered users and 11 million paid users and the company compete with much larger companies such as Alphabet Inc's Google, Microsoft Corp, Amazon.com Inc. While Blue Apron was founded in 2012 and went public within five years, Dropbox co-founders Houston and Ferdowsi have had more than a decade to prepare for this moment. The company's total paid user base of 11 million includes around 150,000 businesses. Dropbox is a computing service that allows customers to store documents, videos, photographs and other files in the cloud.

The company posted revenue of $1.1 billion on a net loss of $111.7 million in 2017.

"But at the same time, the environment is also competitive".

Like Snap, Dropbox warned potential investors that it may never be profitable.

The underwriters for the offering are Goldman Sachs, JPMorgan, Deutsche Bank, Allen, Merrill Lynch, RBC Capital Markets, Jefferies, Macquarie Capital, Canaccord Genuity, JMP Securities, KeyBanc Capital Markets and Piper Jaffray.

  • Kyle Warner