Friday’s share surge indicates investors don’t see that gap as an obstacle to becoming a successful public company. As Dropbox climbed on Friday, all major US indexes clocked losses.ĭropbox appears to have overcome the so-called down round at its IPO, in which a company’s debut market valuation fails to match up to its fundraising promise. Investors were willing to pay up even as equity markets, and especially technology stocks, took a tumble on Thursday, sending the Nasdaq 100 Index on its steepest decline in six weeks. Dropbox sold 36 million shares for $21 apiece on Thursday, raising $756 million, after offering them for $18 to $20 apiece - already an increase from the original price range. After initially targeting a market value of only $7.1 billion, strong demand for Dropbox shares helped close the gap as its IPO priced above the marketed range. Investors’ enthusiastic response to the IPO could help clear one roadblock that’s been holding back Silicon Valley companies from going public: their own lofty private valuations. Dropbox was valued at $10 billion in its last private funding round four years ago. They climbed as much as 50% above their IPO price in earlier trading to as high as $31.60. Shares closed at $28.48 apiece in New York on Friday, giving the filesharing company a market valuation of $11.2 billion.
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