Dropbox's shares soared by as much as 50% in their first day of trading on Friday as investors rushed to buy into the biggest technology initial public offering in more than a year even as the wider tech sector languished.
It had fallen back though shortly after 2 pm to $29.33 a share, a gain of around 39.7 percent from the IPO price.
Dropbox Inc. (NASDAQ: DBX) launched its initial public offering on Friday on the Nasdaq exchange, under the ticker "DBX". In 2018, however, all eyes have actually gotten on Dropbox as well as its very own strategies to go public.
Dropbox shares soared as much as 48 percent to $31 at 11:37 a.m.in NY, giving the company a market value of $11.9 billion.
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(NASDAQ: AAPL). It will be hard for Dropbox because many companies already have millions more in paying users including larger funds to enhance its technology. The challenge for the company moving forward will be how it can convert its large base of unpaid users in hopes of erasing its $112-million loss on revenue of $1.11 billion previous year. The biggest and most recent example of such an IPO was Snap, which went public in March 2017. "It has an attractive story to justify its need for financing and the market dynamics are good, ' Josh Lerner, professor of Investment Banking at Harvard Business School, told Reuters, adding 'But at the same time the environment is also competitive".
Dropbox, based in San Francisco and founded 11 years ago, began as a free service to store large files like photos and music.
The company has yet to turn a profit, however, it reported a revenue of $11.1 billion, which is up from 2016's $844.8 million.
Dropbox has 500 million users and competes with Alphabet Inc's Google, Microsoft Corp, Amazon.com Inc and Box Inc, which had a market value of about $3.1 billion as of Thursday's close. Its full-year net loss, meanwhile, almost halved to $111.7 million.