On its first day of trading as a public company, Dropbox’s shares went up 36 percent. The shares, which go under the ticker symbol DBX on NASDAQ, closed at $28.42 as investors hurried to buy the biggest technology IPO, closing the day with a market value of around $10 billion.
Initially, Dropbox set the price range of the IPO between $16 and $18. Later, due to strong demand, the company increased the IPO price by $2, making it to $21 on Thursday. This gave the company a valuation of $9.2 billion which was much larger than its estimated valuation of $7 billion. However, it was still lower than its $10 billion private valuation from 2014.
On Friday, the company shares started trading at $29, a 38 percent hike on its $21 share price from the previous day. Within minutes of opening, the share price hit a $31 mark, giving it a hike of 48 percent on its IPO price.
Dropbox founders, Arash Ferdowsi and Drew Houston, wrote a public letter ahead of trading on Friday, reminiscing about the early days at Dropbox, “If Einstein were alive today, he’d start his day by clearing Groupons and LinkedIn invitations out of his inbox,” Houston said. “Then he’d get down to work — and right before his Eureka moment, his phone would buzz with a Slack message. Would we still understand relativity?”
Regardless of poor performances by some major tech stocks, which included a 11 percent decline in Facebook in the past month due to the data scandal in which the company got caught, and similarly poor performance metrics shown by Google and Apple, which came down by about 7 percent this month, Dropbox showed a promising performance right on the first day.
“Teams need to have all their information in one place,” added Houston. “It’s crazy that in 2018, it’s easier to search all of human knowledge than a company’s knowledge — at home we have one search box, but at work we have ten. We see a big opportunity to solve this problem by continuing to tie the world’s different tools and ecosystems together.”
Dropbox is the second biggest tech IPO this year, below San Jose based information security company Zscaler which went public on Nasdaq last week with an IPO of $16.