Dropbox has unbelievable week, leads huge rally in new software IPOs
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

Dropbox has unbelievable week, leads huge rally in new software IPOs

2018 might have witnessed a “tech backlash” over its first half, but the effect it’s had on the technology sector overall, for the most part, appears to be underwhelming. Even the companies at the heart of the storm seem to be holding up okay, and some (think Amazon and Netflix) are positively surging.

However, even in this climate, some tech stocks are outperforming the outperformers: new software IPOs. And the undisputed king of them last week was Dropbox. What makes it so great? For once, lets forgo discussions over what’s driving performance for a minute, and just focus on the figures: last week alone, Dropbox’s share price rose by 32%.

Dropbox’s share price had an unbelievably positive five days last week

graph 1806 dropbox

SOURCE: Yahoo Finance

32%. Not year-to-date (which would be impressive enough), but over the last five days. Since the company’s IPO – which was only 3 months ago (March) – its share price has appreciated by 87%. There are a couple of factors responsible for this incredible run.

First of all, Dropbox’s fundamentals are good. The company’s making progress, ticking all the boxes, and looks set to be a great growth story. But perhaps more importantly, many investors are wondering if it’s a possible acquisition target. A spate of M&A activity in the sector (think of Microsoft’s recent purchase of GitHub for $7.5 billion) suggests that’s possible.

Whether Dropbox is on some tech titan’s wish list or not, the company added nearly $4 billion to its market cap last week. If that’s not worth celebrating, nothing is!

Disclosure

Dominion holds Dropbox in its Global Trends Managed Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.