Drop in to the spotify_logo IPO

The Dropbox IPO is here, and we have Dropbox available as a CFD at ADS Securities. Dropbox, the famous cloud storage company, went public on March 23rd, almost a decade after it was founded. It is currently trading on NASDAQ under the symbol DBX.

KEY FACT ONE

Revenue of $1.1 billion in 2017

KEY FACT TWO

500 million registered users

KEY FACT THREE

NASDAQ, Boots and HPE are all enterprise customers

KEY FACT FOUR

Active in 180 countries

KEY FACT FIVE

Net loss of $111.7m in 2017, narrower than the $201.2m loss the year previous

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Why did Dropbox opt for an IPO?

Despite being the first in its space, manoeuvres by other companies such as Box meant Dropbox faced the choice to either expand or die. Historic data favoured a Dropbox IPO to fund an expansion, as big returns have been made by tech companies who had not made a profit at their time of listing, including Amazon, Google (now Alphabet) and Facebook.

Dropbox plan to use the proceeds from the IPO for general corporate purposes, with fresh capital funding a significant expansion. These expansion possibilities include capital expenditures and the possibility to acquire business services or technologies.

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Was the Initial IPO Successful?

Prior to the IPO, Dropbox hyped their product like it was the most outstanding thing in all creation. However, many investors were wondering whether Dropbox was really worth the $10 billion it was valued at during its last round of private financing in 2014.

So far, the Dropbox IPO has promised to erase the memory of a difficult year for technology IPOs after Snapchat (SNAP)’s difficulties.
This is likely due to Dropbox’s market dominance. While Snapchat was a second-tier player after Facebook and Instagram, Dropbox is a major force in its sector. In 2016, Dropbox had 6.5 million paying users. It is almost double that now with 11 million users and still has a lot of room to grow.

Shares in Dropbox shot up around 36 per cent during the first day of trading, valuing the company at around $11 billion. This is due to the fact that Dropbox is growing rapidly as a company, generates impressive cash flow and spends far less than most subscription software companies do in luring new paying customers.

The question now remains whether the first day bounce is sustainable, as buyers are placing faith in a company with a novel business model that struggled to hit its financial stride until relatively recently. As a comparison, SNAP’s value surged by 44 per cent on its opening day but has since struggled to stay above its offering price.

Trade Dropbox CFDs with ADS Securities

If you think you know whether Dropbox’s first day pop is sustainable, or whether it will drop below its IPO price, then you can trade Dropbox CFDs with ADS Securities. Open an account or study our platforms to learn more.

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Opening an account with ADS Securities is simple and secure. You have the option to open a live account via our secure client portal or try our FREE Demo Account.