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Dropbox jumps more than 40% in trading debut
- colinbartlett 9y agoCongrats to Dropbox and to Y Combinator for their first IPO.
- moomin 9y agoWere I a pre-IPO stock holder, I'd be extremely annoyed with the advisers right now.
- arcanus 9y agoAgreed. Gives some ammo to spotify avoiding a traditional route.
- zng00 9y agoSeems they would be happy with the bump?
- mannykannot 9y agoIf their intent is to cash out now, they are probably happy enough. Anyone with a long-term interest in the company would probably prefer for more of that valuation flow into the company's coffers, rather than to the underwriters and others with little long-term interest.
- kolbe 9y agoWhat are you talking about? The "bump" off of the fake price that got made up yesterday? Dropbox was worth $12b yesterday, just like it is today. And a few banks suckered Drew into screwing himself, his investors and his employees by selling shares at a $8b valuation.
- zethraeus 9y agoThey mean the set of people who actually sold to institutional investors at that price, in the process of listing.
- deleted 9y ago[deleted]
- kgwgk 9y agoIf you were a pre-IPO stockholder you would also be a post-IPO stockholder. Selling some of your shares in the IPO at $20 and the rest in a few months at $40 may better than selling a few at the IPO at $40 and the rest in a few months at $20.
- maxerickson 9y agoThe cost of the pop on the float is ~$250 million ($8 on 36 million shares). There's something like 400 million shares in the company. It's not so bad.
- rossdavidh 9y agoSo, basically they set the price wrong?
- iooi 9y agoNo, the bankers set the price perfectly. They just made $360M in a day.
- rossdavidh 9y agoFor the bankers, yes. But Dropbox appears to have set the price wrong, and left a huge amount of money on the table for somebody else (the bankers) to take instead? Or does this 40% jump help Dropbox the company in some way I'm not understanding?
- iooi 9y agoThe bankers will sell this as building "momentum" for the stock. It does not benefit Dropbox directly in any way, it is literally $360M that could have gone to Dropbox but went to the bankers and their clients.
- simula67 9y agoBanks would make money even if stock goes down, through "stabilization" https://www.bloomberg.com/view/articles/2016-11-25/appeals-court-concludes-that-ipos-are-legal https://www.bloomberg.com/view/articles/2016-11-25/appeals-c...
- riku_iki 9y ago> They just made $360M in a day. that's if they are able to liquidate those assets within a day without affecting market price.
- Aunche 9y agoI don't think so. The same thing happened to SNAP where the stock immediate spiked after the IPO due to speculators. Now that a year has past since the IPO, it turns out that the IPO price was pretty reasonable.
- Edmond 9y agoThe pressure is now on to match that price with quarterly revenue/profit, should be interesting. Too bad crystal balls are only a thing of fantasy, I remember seeing Google's post IPO stock price @ ~$81 and saying how absurdly over priced...oh well :)
- regulation_d 9y agoInterestingly enough, Google's initial share price wasn't set by the banks, where they took the Dutch auction route.
- draw_down 9y agoSounds like they left a good bit of money on the table.
- nunez 9y agoMuch congrats to the Dropbox team. I know they've been wanting this for a while.
- mtgx 9y agoMaybe now the public stockholders will finally kick Condoleezza Rice out of their board.
- thebiglebrewski 9y agoWould you buy their stock? What are their opportunities to grow market cap the next 5-10 years?
- nartz 9y agoThey have a good product, no doubt - also interesting that "Box" stock has dropped some as of this hour. However, to become the next giant, I would imagine they need to branch out and gain traction for tangential products. They've tried (dropbox paper) but not sure it has enough market share to make a dent just yet.
- brightball 9y agoI really enjoy Dropbox Paper fwiw. I use it for just about all of my note-taking now, which the calendar integration makes even better. Off the cuff, I can see a few things that they can expand to from where they are: 1. Give better central visibility into tasks/action items created in Paper docs without having to open them. 2. In my opinion, they should attempt to purchase Remember the Milk. It's an extremely polished to-do system that IMHO would be well served as a rebranded Dropbox Todos/Tasks product. If that were to happen, then it would also become the ideal destination for tasks created within Paper. The ability to share task lists would also align nicely with shared folders. 3. Get into the voip fax space by allowing users to sign up for a number, route the documents to specific folders or select an existing dropbox document and fax it to a number. 4. Get into the Docusign/Ecosign/Rightsignature space by allowing a user to select a document and send it to people for signing. They already have all of the tools they need to make this work in terms of sharing and view tracking. They've also got built in version control, so all that's really needed is the interface to designate complete-able fields and actually go through with the signing. It might make more sense to acquire one of those. 5. 3-4 could very easily create tasks in the task system, with direct document links and the ability to auto-complete them once the document was viewed or the task was completed. 6. This one might be a bit more of a long-term stretch, but if they completed those steps they'd have a system that combined document management and task tracking...and at that point they'd be very well positioned to break into the BPM game for small businesses. I've believed for a long time that a more accessible BPM solution could be big...and if you've addressed the passing docs around with tasks, then tracking completion and responses part you've got 90% of the human interaction side of a BPM system covered. Maybe even just direct integrate with Camunda?
- mabbo 9y agoWhy do stocks have to sell at one given opening price? I ask this honestly- I don't understand how public markets work in this respect. What if instead, a giant silent auction occurred. All potential buyers would submit how many stocks and the price they want to pay for them, then the submissions could be sorted from most to least expensive and sold at that submission price until there are no stocks left. This would maximize the income for the founders/investors and achieve a market rate that is fair and accurate.
- rjtavares 9y agoSpotify is doing something like that (direct listing makes the stock be subject to the usual auction-like mechanism of the stock market from the moment it goes public). Here's a great article about it: Spotify's Non-IPO Really Is Novel - https://www.bloomberg.com/view/articles/2018-01-04/spotify-s-non-ipo-really-is-novel https://www.bloomberg.com/view/articles/2018-01-04/spotify-s... > Spotify AB has filed confidentially with the Securities and Exchange Commission to go public via a direct listing, in which it won't sell shares in an initial public offering but will instead just one day declare that it is public and let anyone who wants to trade its shares. The article also explains why Google's case was more akin to a traditional IPO than Spotify's.
- mbesto 9y agoAnd as usual its from Matt Levine who knows his shit and explain it really well.
- ksherlock 9y agoThat's how google did their IPO. It's really a shame it's not the standard way to do it.
- deleted 9y ago[deleted]
- kgwgk 9y agoGoogle shares were all sold at one common price, which is not what your parent suggested.
- nikolay 9y agoHonestly, Dropbox was interesting years ago. Now it doesn't offer much if anything unique.
- kolbe 9y agoAdd losing $300mm to friends of Goldman, JP and DB by letting them screw Drew &co on their IPO pricing to the long list of ways Dropbox has found out how to lose money.
- brianbreslin 9y agoI think most people don't understand that if your prices shoot up so high that means your bankers underpriced it too much and their clients made a boatload and the company missed out.
- MrFantastic 9y agoI've been saying this for years. Banker's should be sued for negligence. The other misunderstanding is that a company splitting shares doesn't increase the value of your position.
- deleted 9y ago[deleted]
- Aunche 9y agoOr it's possible that speculators are driving up the stock to an absurd valuation. Honestly, I trust investment bankers over the FOMO investors willing to pay $29 a share.
- maxerickson 9y agoThey only sold ~10% of the company. So pre-IPO shareholders still get most of the upside. $250 million to the float, $2.2 billion to the rest of the shareholders. It can still be a mispricing, but it isn't so drastically painful if you look at it that way.
- discodave 9y agoYou could argue that the existing shareholders, who own 90% of the stock are better served in the long run if the stock has positive momentum. The calculation for if it's better to sell the other 90% into a hot market would be: 40% of 10% is only 4%. So if the initial pop has a long term positive impact of 4.4% on the price, then the existing shareholders come out ahead. It's debatable, but I think there are two sides.
- deleted 9y ago[deleted]
- jedberg 9y agoMeanwhile, Box is down 6% with a market cap 1/6 that of Dropbox.
- hbcondo714 9y agoWhile Dropbox rose, Box shares fell 8% today even though their annual report released yesterday states YoY growth, delivering their first full year of positive free cash flow. They only mention Dropbox as a competitor "to a lesser extent"[1] in comparison to Microsoft and Google [1] https://www.last10k.com/sec-filings/1372612/0001564590-18-006572.htm/#ITEM_1A_RISK_FACTORS https://www.last10k.com/sec-filings/1372612/0001564590-18-00...
- kapauldo 9y agoThis is the next fit bit. Short this stock and ride profit for the next 4 quarterly earnings reports.