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

Events

Why experience is the new battleground for partners

Join us for an exclusive webinar, in association with Hewlett Packard Enterprise and Technology Services Industry Association (TSIA) and learn about the latest industry insights and how technology services continue to evolve to deliver differentiated value, and how partners can be successful in 2021 and beyond.

Featured

Slideshows

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Show Comments