Where The Dropbox IPO Ranks Among Recent Tech Offerings
- Author: Arturo Norris Mar 24, 2018,
Mar 24, 2018, 23:21
Dropbox shares closed at $28.48 Friday, up 35.62 percent on its first day as a public company.
Cloud storage firm Dropbox Inc [DBX.O] raised the price range for its initial public offering by $2 on Wednesday as investors bid strongly for the first big tech IPO this year ahead of final pricing expected on Thursday.
The San Francisco-based provider of data management services initially planned to price shares in a range of 16 to 18, but raised that to a range of 18 to 20 on strong interest from institutional investors.
Dropbox has never turned an annual profit, but the company has achieved annual sales growth of more than 30 percent in recent years, with its revenue topping $1 billion annually.
The IPO, which values Dropbox at $9.2 billion, is among the most highly anticipated in the tech industry since Snapchat's past year. That price price yields a valuation of $9.2 billion - better than expected, but still below what it was worth in its last funding round, according to The Wall Street Journal. Spotify is valued at about $19 billion in the private market, while Dropbox's market valuation climbed toward $13 billion in the day following the IPO.
Dropbox's IPO price was set at $21, but the company opened at $29 and continued to rise to over $31 per share, surging almost 43 percent.
The company's main shareholders are venture-capital firm Sequoia Capital and its co-founder and CEO, Drew Houston.
In a nutshell, Dropbox lets you create a folder on your computer where you can store your files, which are then hosted in the cloud. It is heavily depended on paid services that provide more storage space and collaboration on a greater number of platforms. It stopped bleeding cash in 2015 and maintained a positive free-cash flow over the following two years.
The company posted revenue of $1.1 billion on a net loss of $111.7 million in 2017. On the other hand, the company's balance sheet still shows a bold red line, though the values are reducing.
Dropbox posted a revenue of $1.11bn in 2017, up 31% year-on-year, as it almost halved its full-year net losses from the $210.2m it returned in 2016.