One of the world’s largest online services for backing up documents, photos and videos is opening its files in an initial public offering (IPO) of stock.
Dropbox Inc is hoping to raise US$500 million in an IPO that comes 11 years after it started in San Francisco. The company confidentially filed for its IPO in October last year, but the information did not become publicly available until Friday.
The filing reveals Dropbox has lost more than US$1 billion since its inception. That includes a loss of US$112 million on revenue of US$1.1 billion last year.
Dropbox boasts about 500 million registered users, but most of them do not pay for its service. Only 11 million users pay for the premium version of Dropbox’s service, a figure that the company is aggressively trying to increase.
That is no easy task, given the fierce competition it is facing. Its rivals in online file storage include three of the world’s most powerful companies — Google, Microsoft Corp and Amazon.com Inc.
A smaller competitor, Box Inc, went public at US$14 per share two years ago and the stock shot to US$23.23 on its first day of trading. It closed on Friday at US$23.32.
Dropbox has not yet disclosed how much of its stock is to be sold in the IPO, nor the price for each share. That should occur during the next few weeks as its bankers gauge investor demand.
The IPO is likely to attract a lot of attention because Dropbox’s service is so widely used.
The stock is to trade on the NASDAQ exchange.
Meanwhile, Dropbox granted about US$190 million in stock awards to three top executives last year, according to the IPO filing.
Dropbox chief executive officer Drew Houston received restricted shares worth US$109.6 million and Arash Ferdowsi, who cofounded the firm with Houston, was handed stock worth US$46.7 million. Their shares will vest if Dropbox’s stock achieves a series of price hurdles ranging from US$20 to US$60 within a decade of the offering’s close, the filing said.
Quentin Clark, who joined last year to oversee engineering, product and design, was given shares worth US$34.1 million in September last year. They will vest over five years as long as he remains on the job. He also got a US$340,000 signing bonus.
Former Hewlett Packard Enterprise Co CEO Meg Whitman, who joined Dropbox’s board in September, received stock worth US$908,800.
Additional reporting by Bloomberg
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