Dropbox’s up to US$648m Nasdaq IPO appears headed for a strong outcome and is well oversubscribed ahead of pricing Thursday night, according to several ECM bankers.
The file-sharing company is expected to close its bookbuild on Wednesday afternoon to sort through the heavy orders for the long-awaited offering.
Demand may even be strong enough to increase the US$16-$18 pricing range, though Monday’s fall in technology stocks (led by Facebook) may make that tougher to justify, one banker said.
Security software company Zscaler was able to up its range ahead of pricing last week and then went on to double on its trading debut on Friday.
Dropbox plans to sell 26.8m shares, while insiders including its founders will sell another 9.2m shares.
Software company and Dropbox partner Salesforce has agreed to invest another US$100m, taking the total amount being raised this week to nearly US$750m.
The base terms value Dropbox at about US$7bn or below the US$10bn mark on a US$350m private funding round in 2014, though this ”down round” could narrow substantially or disappear quickly if the
IPO price rises and or Dropbox trades up strongly on debut.
Dropbox, whose file storage application has 500m registered users and 11m paying users, would rank as the biggest US tech IPO since Snap last year.
“This is a company that is showing very strong growth, has a large addressable market, has very low sales-and-marketing expenses and is throwing off positive free cashflow,” another banker told IFR last week.
