Economy

Dropbox is staring at a downround IPO

Dropbox is staring at a downround IPO

Dropbox hopes to price the initial public offering of its stock between $16 and $18 per share, the company said today in an update to its IPO filing that would place it well below its $10 billion private valuation. Adding in the value of restricted stock units lifts the company's valuation to around $8 billion.

Dropbox, which was valued at $10 billion in its 2014 funding round, would be one of the biggest USA enterprise technology companies to list domestically in several years. And Salesforce has been an investor in Dropbox since 2014, so a closer relationship between the two cloud firms is not surprising.

Dropbox's IPO is expected to be the largest technology offering since Snap went public a year ago.

The Class A shares carry one vote each, while its Class B shares carry 10 votes each. That technique essentially allows Dropbox to set a higher per-share price in its IPO without changing the economics of its previous owners or the company as a whole. At the high end of its offering size, it'd be the third-biggest IPO from an enterprise technology IPO in the past three years, according to data compiled by Bloomberg.

The company's net loss narrowed to US$111.7 million in 2017 from US$210.2 million in 2016.

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Dropbox also agreed to sell $100 million in stock to Salesforce.com's venture capital arm in a private placement concurrent with the IPO, the filing shows.

While Dropbox has not turned a profit since its 2007 founding, its revenue increased more 30 percent a year ago to $1.1 billion, up from $845 million in 2016.

Cloud storage giant Dropbox has revealed more details about its upcoming venture onto the public stock market, according to a report inThe New York Times.

Goldman Sachs & Co, JPMorgan, Deutsche Bank Securities, BofA Merrill Lynch are the lead underwriters for the public offer. Instead, the company's shareholders will most likely see the value of their shares fall when Dropbox, under ticker symbol DBX, begins trading on the Nasdaq.


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