Tuesday, 24 April, 2018

Shares in Dropbox soar into the clouds

Dropbox Hasn't Built a Moat Dropbox price IPO at $21 and lures investors
| 26 March, 2018, 02:35

Dropbox Inc's initial public offering, the largest tech stock debut in more than a year, was priced at $21 per share, the company announced on Thursday, higher than expected.

The stock opened at $29 on the Nasdaq and soared as much as 50 percent to a high of $31.60 in early trading. At the stock's opening price, Dropbox had a market valuation of $12.67 billion, well above the $10 billion valuation it had in its last private funding round.

The solid first-day pop came despite weakness in the wider USA stock market. Plagued by the ongoing data privacy scandal at Facebook, the S&P tech ETF fell more than seven percent this week, its biggest drop since 2009.

According to its website, the company has over 500 million registered users and more than 300,000 teams are using Dropbox business.

Dropbox shares closed at $28.48 Friday, up 35.62 percent on its first day as a public company.

Dropbox Hasn't Built a Moat
Dropbox goes public

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

The stock opened at $29 per share and rose above $30 shortly after, giving the company an $11.9 billion valuation. Shares were trading at $29.35, up 39.4% in NY, after touching $31.60 earlier in the session. In 2018, however, all eyes have actually gotten on Dropbox as well as its very own strategies to go public.

The company will also use this time in the limelight to inform users of its different functions.

The San Francisco-based company, which started as a free service to share and store photos, music, and other large files, competes with much larger technology firms such as Alphabet's Google, Microsoft, Amazon and also with Box.

Dropbox is yet to turn in a profit, but that's common for startups that invest heavily in growth. Its success could be a sign of the strength of tech "unicorns," young companies valued at more than $1 billion. Its full-year net loss almost halved from the $210.2 million in 2016.


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