Dropbox Shares Soar as Much as 48% in Market Debut

by Linda Olson March 25, 2018, 0:32
Dropbox Shares Soar as Much as 48% in Market Debut

The pop in Dropbox's price may bode well for Spotify, valued at roughly $19 billion in the private market. Shares of the cloud-storage company began trading under the ticker symbol DBX (DBX) on Friday, jumping 47 percent in early trading.

The pricing and surge of the IPO came amid a backdrop of a volatile broader market and a pummeling of tech stocks. And given how many analysts, reporters and other CEOs are closely watching Dropbox's performance, it theoretically should make people fear public markets a little bit less. 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. Still, the selloff played a role, people familiar with the deal said. Its stock popped on its first trading day but has since fallen amid concerns about competition and its high valuation.

Some of the demand for Dropbox came from a limited supply of shares available. They bundle together a wider range of offerings than Dropbox can. But, Dropbox's IPO release was highly anticipated despite a strenuous week for tech stocks owing to Facebook's recent data leak scandal. The company up until this week has been supported by private investors including Sequoia Capital and Accel Partners.

"We're pioneering an interesting model", Mr. Houston said. Finally, it has priced its IPO and went public on Thursday night.

After Snap's disappointing IPO - it is now trading roughly 4% below its $17 IPO price - analysts believe the Dropbox and Spotify offerings boost the tech IPO market this year.

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Candidates for IPOs have put listings off in an attempt to grow into the private valuations they have been given. Apple, Amazon, Google and Microsoft all now offer either consumer or enterprise storage services. That's somewhat unique in the cloud storage industry, where enterprise sales often drive income.

It has yet to turn a profit, which is common for startups that invest heavily in growth.

The company reported revenue of $1.11 billion in 2017, up from $844.8 million a year earlier.

With more than 500 million users, Dropbox will. In order to increase revenues, it either needs to convert more users into paying ones, or encourage existing subscribers to upgrade.

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now. and Dropbox, Inc. wasn't one of them!

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