What does IPO Box tell us

The initial public offering of Box securities turned out to be difficult from the very beginning. After filling in the S1 forms on the Internet, a wave of hysteria has literally risen. It is connected with the fact that last year most of the technological IPOs did not show the best results on the dynamics of the value of shares, and companies with the main source of income in the form of subscription services are not well perceived in the current IT market, since the income from the user is not much exceeds the cost of its acquisition.



So why did the Box IPO service last Friday, January 23, be more good news than bad news?



Firstly, many analysts noted this in advance, in case the IPO Box would be “successful”, and it was exactly as we can say, a week after this event, many will reconsider their attitude to such services, in particular and to the initial public offering on the NASDAQ and the NYSE by other IT companies this year, in general.

')

As Box founder himself, Aaron Levy, noted on his Twitter account - technological IPOs are strange, as they revolve around uncertain expectations of an unspecified group of people: “If your stocks fly up, then you leave money on the table. If they fall you let investors down. If the trend is sideways, then you are just boring. ”



Box poured 12.5 million shares into the market for a $ 14 initial offering, hoping to raise $ 175 million with a total business valuation of $ 1.67 billion. At the same time, the initial price range of placement proposed by underwriting banks (these are financial institutions that assist in the initial placement and all the conventions associated with this, as a rule - the largest investment banks in the US), was from $ 11 to $ 13 per share - in this sense , Box even played a bit more risky than originally intended. The risk paid off .



Immediately after the opening of trading on Friday (all newcomers hit the bell for seconds before the opening of trading on the site, immediately giving their papers to the all-powerful hands of the market) the price of a single stock rose to $ 20 and even today, after yesterday’s correction of US indices and profit taking On positive news from the IT market, one Box security costs about $ 20.



Of course, one week is not an indicator, and it is necessary to look at what the dynamics of the value of shares will be for long periods of time: a month, a quarter and, finally, a year. But the market, as it always happens, has already appreciated the placement of the Box in the future, and the consensus is understandable - it turned out quite well. For a company that existed in non-public form for about a decade, and very carefully moved to the exchange, the results are good. This will also spur other companies this year to attract not closed rounds of investment, but to enter the public and open market, which will determine their future.



Of course, in no case should we lose sight of the fact that around Box is an extremely aggressive competitive field, and the matter is not even in Dropbox. More precisely, it is also the case, but last but not least, he shares the same risks with Box: the presence of Google, Amazon and Microsoft on the market, each of which offers similar services, but at the same time can afford to dump on a much larger base users.



This is just one of the reasons for the dissatisfaction that investors showed before Box last Friday: enormous spending on PR and marketing (I’ll say from my own experience - the November WebSummit in Dublin and the March SXSW in Austin, Texas, the company had leased large exhibition spaces) , the lack of an answer to a question related to profit margins - the answer to it from the lips of the creators of the service still sounds voluminous: "This is a big market." What does it mean? What can work without profit? It is unlikely that investors will appreciate it in the long run. On the other hand, the experience of social services shows that it is possible to exist on borrowed funds and not think about the hard monetization and revenue side of the project for a long time, as it happens with Twitter, Instagram and Snapchat. But, nevertheless, Box is a company of a slightly different reason and level of activity - its main task is to provide an online platform for third-party and own applications with single sign-on and data storage.



Otherwise, taking into account the excellent results of most IT-companies for the first fiscal quarter of 2015, which always serves as an indicator of the state and conductor for future placements, we can expect some more extremely interesting initial offerings from other companies that we are already good at. know: Uber, Airbnb, Dropbox, etc. It will not be boring.