- Dropbox surged by as much as 44% in its trading debut on Friday, marking a strong start to the most prominent tech initial public offering so far in 2018.
- The cloud-storage company was worth nearly $12 billion, above its most recent private valuation.
- Dropbox is the most prominent so-called unicorn since Snap to test the public market's appetite for tech startups.
The cloud-storage company had priced its IPO at $21 a share on Thursday, above its previously expected range. The stock opened at $29 per share and rose above $30 shortly after, giving the company an $11.9 billion valuation.
The IPO is yet another gauge of the ability of unicorns -- tech startups valued at $1 billion or more -- to thrive on the public market. The biggest and most recent example of such an IPO was Snap, which went public in March 2017. The stock popped on its first trading day, but has since fallen by about 3.4% amid concerns about competition and its high valuation.
Uber, the most valuable private tech company, is not expected to go public until next year.
The regulatory filing Dropbox submitted for its IPO showed the company had more than 11 million paying users. It earned $1.106 billion in revenue last year, up 32% from the prior year. Its net loss, however, was nearly halved to $111.7 million. It stopped bleeding cash in 2015 and maintained a positive free-cash flow over the following two years.
Like Snap, Dropbox warned potential investors that it may never be profitable.
Dropbox also warned that data and security breaches could hurt its ability to keep customers or attract new ones. The company was hacked in 2012, and over 68 million users' emails and passwords were leaked on the internet four years later.
Dropbox has a dual-class stock structure that gives outsized power to some insiders. For example, Andrew Houston, the co-founder and CEO, will have 24% of the company, while the the venture-capital firm Sequoia Capital will own a 25% stake.
Dropbox is trading on the Nasdaq with the ticker "DBX."