Dropbox signals high demand in tech stock IPO

Dropbox Hasn't Built a Moat

Dropbox's IPO is closely monitored by the investment world, as stock listing will show what is the interest in more than 1 billion Dollars worth young companies. Dropbox considered pricing the IPO as high as $22 a share but, partly because of market conditions, tempered it to $21, still above its updated range of $18 to $20. While the IPO places Dropbox's (DBX) value at almost $9.2 billion, that's still somewhat lower than the $10 billion valuation DropBox had during its last round of private funding in 2014.

A strong debut would bode well for music streaming service Spotify - valued at roughly $19 billion in the private markets - that has also filed for a direct listing and will start trading on the New York Stock Exchange on April 3. Most of the startups with the highest valuations have put off IPOs as they still have access to ample amounts of private capital from big investors to fund their operations. Cloud-security company Zscaler Inc. was the only notable IPO out of Silicon Valley, raising $221 million this month. This move is for DropBox to lure in investors but isn't a good look for customers. As the day went on the company was last trading at $29.90, still up by 42 percent. The stock closed the day just under $28.50.

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

Dropbox has made a public offering this time around. Dropbox is headquartered in San Francisco, CA, and has 12 offices around the world.

The company has yet to turn a profit, however, it reported a revenue of $11.1 billion, which is up from 2016's $844.8 million.

Since then, Dropbox took pains to focus its business and work toward profitability rather than simply pushing for growth at all costs.

"There's certainly more revenue-stage companies that are still private that are looking at when to go public", said Matt Murphy, a partner with the venture capital firm Menlo Ventures.

Dropbox co-founder and Chief Executive Officer Andrew Houston will have a 24 per cent of the company after selling 2.3 million shares in the offering. The Cboe Volatility Index is up as much as 36 since Wednesday as President Donald Trump announced about $50 billion of tariffs against China over intellectual property violations. "That's not the reality being public".

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