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Who is buying this stock?! A company that burns through a TREMENDOUS amount of cash raises enough for just about a year's worth of operations, meaning that the

Who is buying this stock?! A company that burns through a TREMENDOUS amount of cash raises enough for just about a year's worth of operations, meaning that they will almost certainly dilute their stock against next year just to pay for cost of doing business. Their future consists of insisting that they aren't "just online storage", and competing on pricing that is trending towards 0. I'm not invested in this company one way or another, but it really baffles me that people think the company is worth investing in. I'm sure I'm missing something, since I haven't dug deeply into their financials or anything.

ralphael 12y ago
..box it and they will come
tinkerrr 12y ago
>Who is buying this stock?! and >I haven't dug deeply into their financials or anything. should be mutually exclusive, don't you think? If you haven't looked at their financials or anything, how do you know whether it is a good investment or not? You can't just look at 'macro-trends' and determine if individual companies are a buy or not. e.g. since 1970s, cigarette industry has been in a steady volume decline. Guess which stock has been (by far) the best performing stock during since that period? Yep, Philip Morris (which recently split into Altria and Philip Morris)
- objclxt 12y ago
  > since 1970s, cigarette industry has been in a steady volume decline In the US - not globally. The tobacco market is growing and sales are increasing on a worldwide basis. As developed countries stop smoking, developing countries start - and developing countries often have far larger populations.
  - yesiamyourdad 12y ago
    And the product is taxed heavily in the USA which gives the manufacturers cover for price increases. Tobacco is really profitable even in the US. Plus the eCig market has given them new growth prospects.
- tdicola 12y ago
  I'm not an expert, but by all accounts the financials for them are somewhat grim: http://www.forbes.com/sites/benkepes/2014/03/24/boxs-ipo-revenueexpenditure-mismatches-and-the-cult-of-growth-at-all-costs/ http://www.forbes.com/sites/benkepes/2014/03/24/boxs-ipo-rev... They're spending more in sales than they're making back in revenue (nevermind profit). Building a company around spending $2 to make $1 isn't good for the long term (ask Groupon how that worked out for them).
  - mikeyouse 12y ago
    > (ask Groupon how that worked out for them). They're a $5B company four years after their IPO and are selling ~$2.5B annually.. not the failure that people keep representing.
    - jhonovich 12y ago
      Their revenue is flat and they make no profits. That's pretty terrible in this market. http://finance.yahoo.com/q/is?s=GRPN http://finance.yahoo.com/q/is?s=GRPN
- majani 12y ago
  a company feeding a strong addiction is a good long term bet, unlike box
magic5227 12y ago
They are not selling file storage, they are selling enterprise content management.
- eitally 12y ago
  But their ECM offering is basically Dropbox++ rather than Opentext/Hyland/Alfresco/etc. They don't have nearly the feature set of the big guys, and there aren't many enterprises particularly interested in ECM (the "M" part) who would take Box seriously. They might as a simple cloud storage platform, but only if they need something like that and haven't already got something similar from Google or Microsoft. (I'm writing this as the person responsible for ECM & Google Apps at a large enterprise. We looked at Box and were non-plused.)
  - pjwal 12y ago
    And you were plused by Opentext/Hyland/Alfresco? just curious...
bagels 12y ago
For those that wish to read the financials for Box as I did: http://www.nasdaq.com/markets/ipos/company/box-inc-718252-74964?tab=financials http://www.nasdaq.com/markets/ipos/company/box-inc-718252-74...
this_user 12y ago
Traders most likely. They only sold around 10% of the shares in the IPO creating a fairly low float. Low-float stocks are prone to explosive moves which was likely what the underwriters wanted. If the stock can gain momentum and drift higher over the comings months, it will be much easier to place a larger secondary and collect the money the company needs.
- r00fus 12y ago
  Thanks - explains to me more fully why companies who IPO want a "large pop" - it's not just to please the underwriters and early investors or visibility.
hnnewguy 12y ago
Congrats to these guys, nice debut. >Who is buying this stock? Not me, but that's what makes a market.
kasey_junk 12y ago
Remember that it is very hard to short an IPO so the market pressure is mostly up (even more so than normal). More interestingly will be what happens in coming weeks.
aroch 12y ago
>Who is buying this stock?! Speculators that bought and sold to make a profit today. I bought a few hundred shares, sold about half of them (guaranteeing a profit even if the other half crashes to 0) and am holding the other half as either a long term investment or waiting for the next pump and dump.
raincom 12y ago
It can become another Jive software, which has traversed from 16 to 24 (in 3 months after IPO), 6 now.

ralphael 12y ago

..box it and they will come

tinkerrr 12y ago

>Who is buying this stock?! and >I haven't dug deeply into their financials or anything. should be mutually exclusive, don't you think? If you haven't looked at their financials or anything, how do you know whether it is a good investment or not? You can't just look at 'macro-trends' and determine if individual companies are a buy or not. e.g. since 1970s, cigarette industry has been in a steady volume decline. Guess which stock has been (by far) the best performing stock during since that period? Yep, Philip Morris (which recently split into Altria and Philip Morris)

objclxt 12y ago
> since 1970s, cigarette industry has been in a steady volume decline In the US - not globally. The tobacco market is growing and sales are increasing on a worldwide basis. As developed countries stop smoking, developing countries start - and developing countries often have far larger populations.
- yesiamyourdad 12y ago
  And the product is taxed heavily in the USA which gives the manufacturers cover for price increases. Tobacco is really profitable even in the US. Plus the eCig market has given them new growth prospects.
tdicola 12y ago
I'm not an expert, but by all accounts the financials for them are somewhat grim: http://www.forbes.com/sites/benkepes/2014/03/24/boxs-ipo-revenueexpenditure-mismatches-and-the-cult-of-growth-at-all-costs/ http://www.forbes.com/sites/benkepes/2014/03/24/boxs-ipo-rev... They're spending more in sales than they're making back in revenue (nevermind profit). Building a company around spending $2 to make $1 isn't good for the long term (ask Groupon how that worked out for them).
- mikeyouse 12y ago
  > (ask Groupon how that worked out for them). They're a $5B company four years after their IPO and are selling ~$2.5B annually.. not the failure that people keep representing.
  - jhonovich 12y ago
    Their revenue is flat and they make no profits. That's pretty terrible in this market. http://finance.yahoo.com/q/is?s=GRPN http://finance.yahoo.com/q/is?s=GRPN
majani 12y ago
a company feeding a strong addiction is a good long term bet, unlike box

magic5227 12y ago

They are not selling file storage, they are selling enterprise content management.

eitally 12y ago
But their ECM offering is basically Dropbox++ rather than Opentext/Hyland/Alfresco/etc. They don't have nearly the feature set of the big guys, and there aren't many enterprises particularly interested in ECM (the "M" part) who would take Box seriously. They might as a simple cloud storage platform, but only if they need something like that and haven't already got something similar from Google or Microsoft. (I'm writing this as the person responsible for ECM & Google Apps at a large enterprise. We looked at Box and were non-plused.)
- pjwal 12y ago
  And you were plused by Opentext/Hyland/Alfresco? just curious...

bagels 12y ago

For those that wish to read the financials for Box as I did: http://www.nasdaq.com/markets/ipos/company/box-inc-718252-74964?tab=financials http://www.nasdaq.com/markets/ipos/company/box-inc-718252-74...

this_user 12y ago

Traders most likely. They only sold around 10% of the shares in the IPO creating a fairly low float. Low-float stocks are prone to explosive moves which was likely what the underwriters wanted. If the stock can gain momentum and drift higher over the comings months, it will be much easier to place a larger secondary and collect the money the company needs.

r00fus 12y ago
Thanks - explains to me more fully why companies who IPO want a "large pop" - it's not just to please the underwriters and early investors or visibility.

hnnewguy 12y ago

Congrats to these guys, nice debut. >Who is buying this stock? Not me, but that's what makes a market.

kasey_junk 12y ago

Remember that it is very hard to short an IPO so the market pressure is mostly up (even more so than normal). More interestingly will be what happens in coming weeks.

aroch 12y ago

>Who is buying this stock?! Speculators that bought and sold to make a profit today. I bought a few hundred shares, sold about half of them (guaranteeing a profit even if the other half crashes to 0) and am holding the other half as either a long term investment or waiting for the next pump and dump.

raincom 12y ago

It can become another Jive software, which has traversed from 16 to 24 (in 3 months after IPO), 6 now.