Dropbox's market debut could bring a much-needed ray of light to the technology sector. In 2018, however, all eyes have actually gotten on Dropbox as well as its very own strategies to go public. Still, the selloff played a role, people familiar with the deal said. The IPO was initially expected to price at $16 to $18, but that range was increased to $18 to $20 earlier this week due to strong investor demand for Dropbox shares.
The company's 40% first-day jump puts it on pace to be the second-biggest pop this year among tech IPOs behind Zscaler Inc., whose shares more than doubled on their first day of trading earlier this month, according to Dealogic.
Originally, the company expected to raise $756 million, in addition to Salesforce.com Inc.'s $100 million investment through a private placement.
Dropbox is one of a number of tech firms centered around the internet "cloud", allowing users to store data for remote access by any internet-linked devices.
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That said, the firm has enough going for it to keep investors interested. Finally, it has priced its IPO and went public on Thursday night. This is a turn off for short-term investors who do not wish to hold on to a share for too long. Despite the rise in the IPO price, Dropbox's estimate is still below 10 billion Dollars, which the company received in 2014, by private equity financing.
Candidates for IPOs have put listings off in an attempt to grow into the private valuations they have been given.
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. Today, it offers a platform for businesses that enables collaborative editing of documents and other files. 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.
With individuals and businesses alike generating and managing ever-more data - think everything from expense reports and vacation selfies to term papers and customer service records - few can doubt there's a real market for cloud-based storage services like Dropbox.
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