The online storage company Dropbox made the strongest technology IPO in 2018. The company went public on Friday, and its share jumped during the trading session estimating its market value to 12.67 billion USD.
The shares of Dropbox, trading under the symbol DBX, rallied 35.6% to close at 28.48 USD, with intraday gains as much as 50%, following the offering price of 21 USD.
The strong demand suggested not all tech companies have been hit by the events of this week, when big players, especially in social media, have seen their shares dive following reports that a data analysis firm hired by Donald Trump’s presidential campaign misused personal information of some 50 million Facebook users.
The Dropbox IPO raised some 750 million USD in addition to another 100 million USD that Salesforce.com Inc invested in private placement of shares prior to listing. This will turn into the largest technology stock market debut this year. Since it is one of the few companies valued over 1 billion USD that can test public markets in recent years, Dropbox is expected to be a barometer for others, and a solid debut can attract more candidates to enter the public markets. Most of the start-ups with the highest ratings postponed their IPOs as they still have access to high private capital from large investors.
The investors from leading venture capital companies such as Sequoia Capital and Accel Partners as well as mutual funds, including Fidelity Investments and T. Rowe Price, have raised over 600 million USD in Dropbox, believing that the company has a huge potential to dominate the consumer file storage business.
Over the past few years, Dropbox faced intense competition from technology giants such as Google and Apple Inc, who entered the storage business. Dropbox has also begun to offer corporate services.
The online storage company reported revenue of 1.11 billion USD in 2017, up from 844.8 million USD an year earlier. Its net loss nearly halved from 210.2 million USD in 2016.