It has been a while since the most recent initial public offering of major company, but another major initial public offering is in the pipeline. Online storage service Dropbox filed an application for an IPO at the beginning of January. The IPO and investing in Dropbox in general will be discussed on this page.
Dropbox applies for an IPO
Bloomberg recently announced that online storage service Dropbox has submitted an application for an IPO. According to the same sources, investmentbanks JPMorgan Chase and Goldman Sachs are going to support the IPO of this international company. The IPO still has to take place in the first half of 2018, but when exactly is not yet known.
Dropbox is currently valued at approximately 10 billion dollars. Therefore, the possibility of an IPO of such a large company is big news.
Dropbox offers storage services via the cloud. The company has hundreds of millions of users. Not only consumers use the Dropbox storage services, many small and large companies do so as well.
The company was founded a few years ago by Drew Houston. Last year, the CEO of the company said in an interview that the annual turnover of Dropbox amounts to more than 1 billion dollars. According to him, the company has been profitable for years already. Dropbox earns money by offering expansion packages for its storage services. You can store your documents for free at Dropbox, but you have to pay if you want more storage space. This revenue model obviously seems to work for Dropbox, given the high turnover of the company.
Investing in Dropbox
If Dropbox actually goes public, it will be open for investors to invest in this successful company. You do so by buying Dropbox shares. The IPO price of the Dropbox shares is not yet known. This means we don’t yet know at which price you will be able to buy Dropbox shares. But you can do some research yourself to set yourself a reasonable price range. If the IPO price is within or below this range, you buy Dropbox shares.
If you want to invest in Dropbox, you can do so immediately after the initial public offering. Another option is to wait a little longer before purchasing Dropbox shares. If you wait a little longer before investing in Dropbox, there is a possibility that the shares of the company have become cheaper. This means you can buy more shares for the same total investment.
Unfortunately, there is also a risk that the company’s shares have become more expensive. In this case you pay more per share and therefore you can buy fewer shares in Dropbox for the same investment. It is better to set yourself a price target before the IPO and base your investment decision on that.
To purchase Dropbox shares, you need to sign up with an online broker. You can choose how many shares you want to buy. It’s up to you to decide how much money you want to invest in Dropbox. We advise you to diversify your investments by buying multiple shares and / or other investment products, so that you can diversify and thereby reduce your risk. If Dropbox turns out not be such a good investment after all, you will at least have not lost all your money.