DropBox Inc (NASDAQ:DBX), a file hosting service company has recently announced that it is preparing for an initial public offering of its shares. The American company announced earlier this week that it expects its value to be at around $7.1 billion which is around one-third of its commanded valuation back in 2014.
Dropbox started in 2014 as a company that offers free storage for photos, music, and other files. The storage service company then has been able to raise more than $600 from private investors. Other than that, Dropbox has received attention from mutual fund investors as well as hedge funds due to the outlook of upbeat earnings from the company.
The IPO of the company is set to be the biggest tech IPO following comments from analysts who have commented on the so called “dry spell” in tech IPOs over the past years. The company is expecting the IPO to come at a $16 to $18 per share range. This would raise around $648 million for the company.
The San Francisco-based company is expected to launch the initial public offering of its shares this Friday. The final IPO price of the company will be based on the feedback and response of its investors prior to the official IPO launching.
The price also represents a 30% decline from its valuation worth $10 billion back in 2014. The financing round of the company was led back then by BlackRock Inc (NYSE:BLK).
A recent report revealed a slide from a presentation of the company’s roadshow meeting in New York last Monday which is a part of the marketing of its shares. The report showed that the company has set a range of around 76% to 78% in gross margins which is up from their gross margin of 68% last year.
The company also intends to boost operating margins to a target range of around 18% to 20% which represents a 5% rise from last year. The following target has not been announced by the company’s previous statements regarding its initial public offering.
Despite the strong competition the company is facing, Dropbox has been able to deliver on its strong top-line growth with its revenue growing by 31% last year to $1.11 billion. The company also posted a growth of 40% in their revenue back in 2016. Dropbox’s core service has become one of the main growth drivers with more and more users paying for a storage more than the free 2GB offered by the company.
Following its official IPO launch expected this Friday, public shares of the company are expected to begin trading during the second half of next week. The company will be listed under the symbol DBX on the NASDAQ composite index.