Menu
Dropbox’s multi-billion dollar IPO is “oversubscribed”

Dropbox’s multi-billion dollar IPO is “oversubscribed”

Offering is expected to price Thursday, and the stock will start trading on the Nasdaq on Friday

Cloud storage company Dropbox’s initial public offering was oversubscribed, two people familiar with the matter said on Monday, indicating healthy demand for the first big tech IPO this year even as tech stocks opened the week on sour note.

While investor appetite looked encouraging with three days to go before final pricing, it was not clear if that would be strong enough to lift the deal above of the initial range of US$16 to US$18 a share that Dropbox set last week.

The offering is expected to price Thursday, and the stock will start trading on the Nasdaq on Friday.

"It is early to predict the pricing," a separate source told Reuters. “But what I can say is that from the conversations it seems the market is interested in it and IPO seems to be bright.”

The three sources asked not to be named as the IPO pricing process was still underway.

Dropbox's IPO comes in what is sizing up to be a challenging week for stocks, with the U.S. Federal Reserve set to raise interest rates on Wednesday, a day before the Dropbox deal is set to close.

Tech shares also fell hard to open the week, with Nasdaq down more than two per cent on reports of Facebook’s latest data privacy problems.

Dropbox's IPO also comes on the heels of an upsized deal last week from cyber security firm Zscaler and is being watched as a barometer of investor enthusiasm for tech unicorns - young companies valued at more than US$1 billion - after Snapchat owner Snap’s shares cratered following a much-touted IPO a year ago.

Dropbox is selling 36 million shares, and the offering could be increased by 5.4 million if underwriters exercise their right to buy more stock.

At the high end of the indicated pricing, it could raise nearly US$650 million, making it the largest tech IPO since Snap hit the market just over a year ago.

The current price range suggests the San Francisco company, co-founded in 2007 by Andrew Houston and Arash Ferdowsi, will hit the public market valued at roughly US$7 billion, a hefty discount to the US$10 billion implied by its last funding round in 2014.

The company has 500 million users and competes with Alphabet’s Google, Microsoft, Amazon.com and has Box as its main rival.

(Reporting by Sweta Singh, Nikhil Subba and Diptendu Lahiri in Bengaluru, Editing by Dan Burns and Saumyadeb Chakrabarty)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags dropbox

Featured

Slideshows

The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments