Dropbox surges 44% in trading debut

Dropbox surges 44% in trading debut

Dropbox surges 44% in trading debut

San Francisco-based data-storage company Dropbox Inc. opened up around 40 percent Friday relative to its initial public offering price, with investors showing enthusiasm for the United States' biggest tech IPO in more than a year. The final share price slightly exceeded the expected range of $18 to $20, which itself was increased from the original range of $16 to $18 set by the company last week before its investor road show started.

Originally, the company expected to raise $756 million, in addition to Salesforce.com Inc.'s $100 million investment through a private placement.

If Dropbox shares hit public markets at $21, as CNBC's source suggests, the company will be valued at around $8.2 billion, which is still down from its last private market valuation of $9.7 billion at the company's Series C round, according to Crunchbase data. The gradual up movement of Dropbox IPO price per share is in the wake of strong anticipated demand. For instance, investors had to wait for nearly a year before Snapchat's shares rebounded and started trading above its June 2017 IPO price of $17 per share.

The company's shares surged by 50 percent on Friday, March 23 2018, its first day of trading.

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.

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In the filling to the US Securities and Exchange Commission, Dropbox reports 1.11 billion Dollars of revenue in 2017, representing an increase of 31% yoy. 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. For example, Andrew Houston, the co-founder and CEO, will have 24% of the company, while the the venture-capital firm Sequoia Capital will own a 25% stake.

Dropbox competes with Box as its main cloud storage rival, as well as consumer cloud offerings from Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN) and Google (NASDAQ: GOOGL).

Dropbox's initial public offering could pave the way for other unicorns to soon go public, letting their early investors and founders cash in on huge investment gains that now only exist on paper.

The company made its public market debut at a time when technology stocks have slipped out of favor. Dropbox provides file hosting services like cloud storage, personal cloud, cloud synchronization and client software. We generated net losses of $325.9 million, $210.2 million, and $111.7 million in 2015, 2016, and 2017, respectively. The company was hacked in 2012, and more than 68 million users' emails and passwords were leaked on the internet four years later.

Dropbox has also had more time to adjust to life in the spotlight.

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