Data-sharing giant- Dropbox, might be the second of US technology companies to break the reluctance of announcing its first public offer this year.
This follows a trend that spans between the last five to ten years of increased anxiety among technology companies in the United States about alleged poor valuations assigned to them by stock market investors whose primary motives are profitability.
This wide-spread uncertainty about what their fate would be if they took the step has forced some major global tech brands like Uber, Airbnb, among others to repeatedly shed-off the decision to go public.
In fact, the only technology company that has embraced that decision so far this year did so out of intense pressure from its key players amidst strict valuation process that was significantly lower than it had forecasted.
Snap Inc., owner of one of the world’s leading messaging app – Snapchat was compelled to reduce its Initial Public Offer (IPO) valuation and has ever since kept its shares largely on the decline as well as its market capitalization barely above $21 billion.
To add to that, a statistics published by Thomson Reuters data last year(2016) had the combined proceeds from tech IPOs plummet significantly from $34 billion as at 2014 down to $6.7 billion in 2015 and subsequently $2.4 billion in 2016 respectively.
These and the already mentioned hostility of stock investors towards techs make the move by Dropbox a highly risky one and has since split its owners along differing opinion lines.
Founded by Drew Houston and Arash Ferdowsi– both former student at the Massachusetts Institute of Technology (MIT), Dropbox currently has a user-base that is well over 500 million, and had earlier in the year secured a credit line of about $600 million dollars with the expectation of floating its first public offer later in the year.
While IPO valuations for techs are generally low or even poor, especially for the US techs: the company believes it can achieve a valuation figure of at least $10 billion.
Its CEO also claims it is on course to hitting an over $1 billion in annual revenue for the current year. Meanwhile, its closest rival was, barely two years ago (2015), valued at $1.67 billion when it went forward for its IPO.
While one could easily dismiss the company’s views as sheer optimism that will be subject to the strident scrutiny of investment bankers at Wall Street: it’s important to note that if the deal is successful, Dropbox will be indisputably the second largest US technology firm to go public.
Now according to a source last Friday, Dropbox is currently involved in on-going discussion with potential underwriters which includes some leading Wall Street investment bankers for the IPO process.