Share:

Dropbox Shares Soar by Nearly 50% on First Day of Trading

Share:

With investors rushing to buy into the biggest technology initial public offering (IPO) in over a year, Dropbox shares surged as much as 50% on their first day of trading today. According to Reuters, the stock, which opened at $29 on the Nasdaq, shot up to as high as $31.60 in early trading.

Dbx

At $29, the opening price for Dropbox shares, the company had a market valuation of $12.67 billion, which is well above the $10 billion valuation it had in its last private funding round. The solid first-day pop in the stock stood in contrast to weakness in the wider U.S. stock market. The S&P 500 slid 0.35% while Nasdaq dropped 0.6%, adding to losses of more than 2% each on Thursday.

Dropbox is going public at the right time. It has an attractive story to justify its need for financing and the market dynamics are good,” said Josh Lerner, professor of Investment Banking at Harvard Business School. “But at the same time the environment is also competitive”.

“The strong performance of the Dropbox IPO may open the door for more technology unicorns to IPO throughout the rest of 2018,” said Sohail Prasad, co-founder and co-CEO of Equidate, a platform for trading of shares in private technology firms. “If investors had bought Dropbox stock within the last six months, they’d be up over 75 percent.”

Meanwhile, music streaming service Spotify, which is currently valued at roughly $19 billion in the private market, has also filed for a direct listing and will start trading on the New York Stock Exchange on April 3rd.

Share:

Deals