Can the Dropbox IPO revive the technology sector?

Dropbox Hasn't Built a Moat
Dropbox price IPO at $21 and lures investors
Author

25 March, 2018

Co-founder Arash Ferdowsi's net worth climbed to US$1.1 billion Friday as shares of the file-sharing company jumped as much as 50 per cent on its first day of trading.

Dropbox Inc co-founder and CEO Drew Houston stands outside the Nasdaq Stock Market as Dropbox is listed for the company's initial public offering at the Nasdaq Market Site in New York March 23, 2018.

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.

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.

Dropbox Inc. (NASDAQ: DBX) launched its initial public offering on Friday on the Nasdaq exchange, under the ticker "DBX". Dropbox gives away a basic level of storage for nothing but charges for premium services, including pricier business subscriptions. However, this amount still falls short compared to the $10 billion valuation it received during its last round of private funding in 2014. The new price range suggests the company could have a market capitalization of up to $8.7 billion and the IPO could raise up to $720 million.

Dropbox attracted many other investors such as Sequoia Capital and Accel Partners. Unlike many founders, the 35-year old is set to become one of a rare breed who takes their idea all the way to a public company. Its full-year net loss, meanwhile, almost halved to $111.7 million.

More news: Footage Released of Florida Deputy Not Entering School During Shooting

Dropbox has 500 million users and competes with Alphabet Inc's Google, Microsoft Corp, Amazon.com Inc and Box Inc, which had a market value of about $3.1 billion as of Thursday's close.

While DropBox has revealed the total user count and the number of paying customers, many competitors don't reveal how many premium customers they have.

Once Dropbox goes public, what's next?

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

Goldman Sachs & Co LLC, J.P. Morgan, Deutsche Bank Securities, Allen & Company LLC and Bank of America Merrill Lynch are among lead underwriters to the offering.


More news


  • Nigerian Govt Lied, Boko Haram Fighters, Money Swapped For Dapchi Girls

    Nigerian Govt Lied, Boko Haram Fighters, Money Swapped For Dapchi Girls

    They will arrive Maiduguri first before going to the Yobe town, said Segun Adeyemi, special adviser to Minister of Information. He said some of the girls, aged between 11 and 19, looked "panicked" initially and could barely respond to questions.
    Alibaba doubles Lazada investment to $5.3b

    Alibaba doubles Lazada investment to $5.3b

    Alibaba's doubling down in Southeast Asia comes just three months after Amazon launched its Prime service in Singapore. Alibaba's stake will increase to an undisclosed amount following the latest investment, a spokeswoman told Reuters .
    Brexit: Negotiators Agree To A 21-Month Transition Process

    Brexit: Negotiators Agree To A 21-Month Transition Process

    Longer term, the transition deal may buy people time but business still faces a "cliff edge" of uncertainty come 2021. This year, Prime Minister Theresa May insisted that the rights of those newcomers would be "different".
  • Tear gas halts MP vote on key Kosovo border deal

    Tear gas halts MP vote on key Kosovo border deal

    Montenegro, which has approved the deal, recognizes Kosovo's 2008 independence from Serbia, which Belgrade still rejects. It wasn't clear if the session would resume after the tear gas incident, AP said .
    Judge rules 'Apprentice' contestant's lawsuit against Trump may proceed

    Judge rules 'Apprentice' contestant's lawsuit against Trump may proceed

    The court noted that Trump making statements about Zervos on the campaign trail "does not make them any less actionable". But she claimed Trump kissed her "very aggressively" and grabbed her breast, and became angry when she rebuffed him.
    Alamogordo students peacefully protest Parkland shooting

    Alamogordo students peacefully protest Parkland shooting

    The Harford County public school superintendent also forbade students from leaving claiming safety concerns. Washington High School were placed on a "soft" lockdown to prevent visitors from entering the school.
  • Trump administration bans transgender people from serving in the military

    Trump administration bans transgender people from serving in the military

    This hateful ban is purpose-built to humiliate our courageous transgender members of the military who serve with honor & dignity. She said it was meant to "humiliate" transgender service members.
    Hawk in the Oval: Will John Bolton's views rub off on Trump?

    Hawk in the Oval: Will John Bolton's views rub off on Trump?

    The 69-year-old Republican has been a vocal proponent of pre-emptive military action against North Korea and Iran . If there were ever any checks on the erratic, impulsive Trump foreign policy, they almost vanished last week.
    Raiders trade returner Cordarelle Patterson to Patriots

    Raiders trade returner Cordarelle Patterson to Patriots

    He led the National Football League in kick return average in 2013, 2015, and 2016, topping 30 yards per return each season. But the Patriots have a knack for turning journeyman receivers into stars, so this is a good career move for Patterson.
  • Naomi Osaka wins first WTA title

    Naomi Osaka wins first WTA title

    She was broken in the opening game of the match but from 3-all Osaka dominated while Kasatkina failed to play with confidence. Osaka had a tough draw on paper, but only lost one set (to Maria Sakkari in the fourth round) en route to the title.
    Fortnite Battle Royale competitive season details coming soon

    Fortnite Battle Royale competitive season details coming soon

    Although, you should know that you'll encounter bots in the first few games. "We are investigating this now and will update soon". Sure enough, a battle royale mode or standalone branded Call of Duty game would easily and quickly become the most played around.
    Aide confirms death of US Rep. Slaughter

    Aide confirms death of US Rep. Slaughter

    She was the only woman to hold that position and remained the committee's ranking minority member at the time of her death. After graduate school, she and her husband, Robert "Bob" Slaughter, moved to the village of Fairport, N.Y.