The pricing and surge of the IPO came amid a backdrop of a volatile broader market and a pummeling of tech stocks. The company debuted with an initial market cap of over $8B. You can also use Dropbox to share large files quickly with other people, which is a feature commonly used by consumers and businesses everywhere. Still, the selloff played a role, people familiar with the deal said.
The IPO price of $21 per share is already way above the $16 to $18 price range previously proposed by the company earlier this month.
Harvard Business School professor of investment banking Josh Lerner explained that "Dropbox is going public at the right time".
Cloud storage firm Dropbox is set to begin trading today following an initial public offering that will see the company valued at $9.2bn (£6.5bn) - ahead of some Wall Street estimates, but still below the company's valuation as a private company.
Some of the demand for Dropbox came from a limited supply of shares available.
In the technology sector, the largest share of investor attention over the past year has been directed toward blockchain-based startups and companies related to the cryptocurrency space. Plagued by the ongoing data privacy scandal at Facebook, the S&P tech ETF fell more than seven percent this week, its biggest drop since 2009.
Last year, investors were burned when Snap went public. Most of the startups with the highest valuations have put off IPOs as they still have access to ample amounts of private capital from big investors to fund their operations.
At an unpredictable time for tech companies and social media giants, California-based tech unicorn Dropbox looks to be entering a higher gear, following a better-than-expected IPO posting. It provides services for backing up documents, photos and video. But it also marks a bit of a disappointment considering that the company had been valued at $10 billion in a private investment in 2014.
Now that it is a public company, it is expected that Dropbox will be pressured to start turning a profit. While more than $12 billion in stock has been sold in US listings this year, up by a third from the same period in 2017, technology companies have been largely absent, according to data compiled by Bloomberg.
DropBox said it has 500 million users but among them only 11 million pay DropBox for premium services.