DropBox IPO priced at $21 to lure in investors

DropBox IPO priced at $21 to lure in investors

DropBox wants to do well for its IPO, so it’s priced at $21 per share. This move is for DropBox to lure in investors but isn’t a good look for customers. The company is entering the business with a good amount of consumers under its belt, but other companies like Apple and Google are making an impact on cloud storage industry already, thus pushing back DropBox. Moreover, other backup solutions like Carbonite and Backblaze offer more affordable options for cloud storage.

The company boasts 500 million users but among that count, only 11 million are paying for the premium service. Patrick Moorhead, the Analytica with Poor Insight Strategy, says that consumers of DropBox are “a loss leader.”

The company sold 36 million shares, and a source told CNBC the offering was 25 times oversubscribed. The company raised $756 million in the largest tech IPO since Snap Inc.’s last year. DropBox is trading on NASDAQ under “DBX.”

While DropBox has revealed the total user count and the number of paying customers, many competitors don’t reveal how many premium customers they have. Google says it has 800 million users and Apple has said it has 782 million users. For DropBox’s cloud storage, it will run you $120 per year for 1TB. Google charges $120 per year for 1TB, Amazon Drive charges $59.99 for unlimited storage and Apple iCloud charges $120 per year for 2TB of storage.

Hamza Khalid

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